Options to buy a house.

seanym007

Hi, I'm after some advice or somewhere I can get some advice. I'm currently privately renting a 3 bedroom house with my wife. Our rent is £800 per month. I have rented property since I moved out of my parents house 12 years ago, and now I'm desperate to try buy a house, especially as my wife and I are looking to have children soon. Now we have some financial challenges.. We have no savings, my wife is in the final stages of a 6 year IVA and I've got around £20k personal debt. We are both in full time employment, and combined we earn around £61k a year. I'm sure we can afford to buy a house and pay the mortgage..

Do we have any options at all?

Thanks!

Sean M

BitterAndTwisted

You have a combined income of over 60 grand but debts of 20 and no savings. Not a chance in hell!

Thinking you can afford to pay a mortgage is one thing but having no savings demonstrates that currently you can't. Owning a home entails being able to afford all those little things which crop up from time to time for which you will need cash reserves or the property will fall into disrepair.

That IVA could be a millstone around your necks for some time and might mean you buying in your own name only. WHEN you have saved up a suitable deposit of 5% as an absolute minimum.

Daerve

BitterAndTwisted wrote: »

You have a combined income of over 60 grand but debts of 20 and no savings. Not a chance in hell!

Thinking you can afford to pay a mortgage is one thing but having no savings demonstrates that currently you can't. Owning a home entails being able to afford all those little things which crop up from time to time for which you will need cash reserves or the property will fall into disrepair.

That IVA could be a millstone around your necks for some time and might mean you buying in your own name only. WHEN you have saved up a suitable deposit of 5% as an absolute minimum.

Sorry to be so negative but this is spot on. The days of 100% mortgages are long long gone.

Without a minimum 5% you have virtually zero hope of getting a mortgage.

Jon_B_2

Get yourself on the Debt Free Wannabe board. Sounds as if you need to learn to budget before you consider a mortgage.

Babbawah

An IVA and £20k of debt when your combined incomes exceed the national average is not good.

Learn how to manage your life's and you'll find that the rest simply slots into place.

Annisele

You can't afford to buy a house.

On the face of it, income of £61k a year plus an IVA and £20k of debts says you can't manage your money. But I suspect your circumstances have changed at some point, and you ran up the debts when you had less money coming in? If that's the case, a lender will worry that you won't be able to pay a mortgage if your circumstances change again (eg if you have children and one of you has to give up work).

Go have a look at the debt-free-wannabee board, and you'll find lots of ideas for shrinking your debt.

seanym007

Hi,

Thanks everyone for your direct comments..

To clarify, my personal debt was £30k but is now down to 20, and the IVA is my wife's, which she got not long after we met, but as mentioned it will be completed in a couple months, and I have 4 years left on my loan. That said I do take your comments onboard..

I have considered the debt free forums, but I budget properly, and I don't want to go on a debt management plan, hence why my debt is reducing, just not as quickly as I'd like.

The one good thing is my employer operates a share save scheme, of which I'm a member. I believe now that this is my only hope of getting any sort of deposit.

In terms of my wife's IVA, how long realistically would she need to wait before she can start rebuilding her credit profile?

Annisele

The debt free wannabe forum isn't just about debt management plans! There's lots of information on there about how you can clean up your credit file, and how you can pay off debts quicker (without a DMP).

If you don't have any savings at all, then your credit rating is irrelevant. No deposit = no mortgage.

I don't see why your employer's share save scheme is your only hope of getting together a deposit. No matter how good you are at budgeting, I suspect there's more to be trimmed off. If you spend less, you'll save more - producing a deposit.

Dhrucku

All I am going to say is you're doing pretty well in securing jobs that pay £61k in total, how on earth did you manage to accumulate debts of >30-35k...?

Seems bizzare.

fairy_lights

Why are you renting a three bedroom house when it's just the two of you? If you rented a one bedroom flat instead you would be able to save a lot more money towards a deposit.

BitterAndTwisted

Consider living on one salary once your wife has settled all her debts via the IVA and putting that towards your savings-pot.

There are no short-cuts to getting a decent deposit together other than spending a great deal less than you earn. And doing that for as long as it takes.



"In terms of my wife's IVA, how long realistically would she need to wait before she can start rebuilding her credit profile?"

This is a question which could be answered by the folks on the Debt-Free Wannabe part of the forum in addition to getting help via posting up an SOA and keeping a spending-diary.