Options to buy a house.

Tigsteroonie

seanym007 wrote: »

I'm a formula 1 fan ...

I do try and maintain a little quality of life ...

[Cars on finance] Yes it's more preference than have to ...

Going backwards to a smaller house, less cars, is something I'm not ready to do yet.

All your preference.

seanym007 wrote: »

I really would love to own my own house instead of paying the mortgage of somebody else's, but it's not worth giving up life experience for..

And that's your preference too.

Thank you for clarifying that you won't sacrifice your quality of life to secure your financial future. I don't think there's much point anybody else responding.

I wonder what your wife thinks ...

Jhoney_2

seanym007 wrote: »

I didn't want to mention I pay for sky since I know that's something people would suggest to get rid of, and rightly so. The reason I have it is pretty basic. I'm a formula 1 fan, and the only way I can watch all the races is with sky package I've got. It annoys me, but there you go..

Yes the interest on a couple of my debts is pretty high, 8.5, 16.9 and 27. I pay as much as I can on the debts I owe, but I do try and maintain a little quality of life. That said, yes there are always savings to be made.. Just not ready to go the extra mile I guess you all are suggesting.

Both cars are on finance and not included in the £20k debt. Yes it's more preference than have to..

In a couple years time I should get £8k out of my current scheme, and the same again the year after. It's all linked to the performance of the business, which at the moment is stable with growth, but I realise that could all change..

I guess I was hoping there was some way of having my cake and eat it, but as I assumed there isn't..

I appreciate all the advice, but picking holes in my maths or questioning my reasoning is something I hadn't bargained for..

I have a spreadsheet with all my outgoings clearly outlined.. I'm comfortable with where the cash is going.. Enough said

We should be a lot more comfortable than we are, but going backwards to a smaller house, less cars (you don't own), is something I'm not ready to do yet. Maybe in a couple years when in the same position I might change my mind.

I really would love to own my own house instead of paying the mortgage of somebody else's, but it's not worth giving up life experience for..

The life experience of F1 viewing , financial discomfort and future uncertainty? OK.

Thanks again, your advice is appreciated, and has given me a lot to think about.

These are your preferences, so your question is moot. The good news is, you are making them with your eyes wide open.

bouicca21

I don't understand. If you are not willing to make changes, and clearly are not desperate to buy a home, although you first indicated that you are, why ask for advice?

Jhoney_2

bouicca21 wrote: »

I don't understand. If you are not willing to make changes, and clearly are not desperate to buy a home, although you first indicated that you are, why ask for advice?

Entertainment in the F1 off season?

Seriously though, it's ok to be in two minds about what to do in a given situation, but it does boggle the mind a bit as it sounds like OP knows their circumstances and what they want perfectly well.

mildredalien

I can sympathise to an extent, I racked up debts while my earnings were pitifully low and I was the sole wage earner, but was still paying them off when on a seemingly reasonable salary.

I also made decisions and choices that weren't 'optimal' as far as throwing every penny towards debts and paying them off ASAP was concerned. For me there was a balance between paying off my debt and having a decent quality of life.

However, there are some large holes in your finances and some pretty easy savings to be made if you really want to buy a house of your own. You just need to think about what is more important - watching F1/having nice cars/not bothering to count pennies, or really pushing to be able to afford a mortgage. You asked the question about what options there are. Pretty much the only option is to get that debt paid down ASAP and start saving as much as you can. No-one is saying you have to live like a hermit, but you need to properly look at your income/outgoings and start prioritising.

Bad debt stays on credit files for 6 years, you might want to ask in the DFW boards about IVAs specifically and how they might affect your chances. Having £20k of unsecured debt and 2 cars on finance will definitely dent your chances of getting a mortgage (and a decent rate) no matter how much you save or earn.

Kynthia

OP there's a lot of people that don't live a bare and frugal life in order to pay off debt. However you seem to be spending a fortune on luxuries and be unprepared to make any sacrifices at all.

You have significant debts and have no chance of owning your own home for many many years. Yet you have a car more than you need, newer/more expensive cars than you need, a Sky package just because you want to watch ALL F1 races, and a bigger property than you've needed. You used credit to pay for a wedding and a honeymoon when you were already in debt instead of waiting or doing it on a budget and things are only going to get worse when you have children with your current wife and your income reduces and expenses go up.

You also seem to be incredibly poor at managing your debt as you have staggeringly high interest rates which surely could be reduced. You don't seem to realise that saving instead of paying off more of the debts with these very high interest rates, prioritising the highest, costs you even more money each month. Plus you don't include the car finance in your debt figures when it's obviously a debt, costing you interest, and mortgage lenders will include it in their figures.

Some relatively small sacrifices and life changes, plus some action on reducing your interest rates and putting your spare money in the right place, would leave you so much better off that it's hard for people here to see why you won't do it. There are free places you can get advice on this and it wouldn't mean going on an official debt management plan. This would then mean better future security for your family.

seanym007

Yes, thanks for all the advice..

I do have a pension plan, as does my wife. Although my wife pays the maximum into hers, I don't.. So something else to consider..

The suggestion is correct, I don't want to reduce my standard of living at this stage. I would say it's particularly extravagant, but it's the minimum.. That does have a real reality that ill still be renting when I'm 70.. Hopefully I can continue proceeding up the promotion ladder and earn a wage that I need..

Thanks all..

Jhoney_2

Do you have a mate that you can go around to for watching the F!? Is it available at one of the local pubs, like football is? Just a random thought there, but also do you want the fruits of your hard work to be absorbed by high interest or the comfort of your family? The two propositions are not inevitably bound together .

fairy_lights

seanym007 wrote: »

The suggestion is correct, I don't want to reduce my standard of living at this stage. I would say it's particularly extravagant, but it's the minimum.. That does have a real reality that ill still be renting when I'm 70.. Hopefully I can continue proceeding up the promotion ladder and earn a wage that I need..

So rather than cut back and save you're just going to hope you get promoted and get a pay rise as a route on to the property ladder?
I really don't understand your way of thinking there. You are both earning decent salaries and would be able to make serious savings if you moved somewhere cheaper, downgraded your cars, gave up sky tv etc. Not massive, life altering sacrifices, just a few small changes for a few years. But you won't?

audigex

Firstly, I think some of the replies on this thread are perhaps a little cynical and judgemental. £20k is a fair chunk of debt, and your wife's IVA is an issue, but it's still doable. £60k is a respectable enough income that you can deal with this unless you're in London or somewhere fairly expensive, in which case this post probably doesn't apply. In that case, perhaps consider moving, because you're never going to afford £400k+ for a house in London in your current circumstances.

Firstly, how much is a basic house in your area? ie a small family home: 3 bedroom terrace or small semi detached? Nothing extravagant, but enough to raise children in for at least a few years?

I'm going to assume somewhere between £100k and £200k. That would require a deposit of £5-10k. In theory your combined income would allow you to borrow up to £285k with a £15k deposit.

1) You have 20k debt you say will be cleared in 4 years? So you can pay off £5k/year. That means you can also save £5k/year

2) If you can save £5k/year, you could have enough deposit to buy a £100k house in 5 years, a £200k house in 6 years, or a £280k house in 7 years.

3) Once you've got the deposit, you could afford the monthly payments. On a 30 year term, a £100k house would be somewhere around the £450/month and a £200k house would be £850/month (comparable to your monthly rent). A £280k house would, I suspect, be a push at £1150

If you wait an extra year to cover fees and have a little in the savings in case something expensive breaks on your new house, you could potentially be looking at a house in that £100-200k range in 6-7 years. I don't know where you live, but that would put you in range of a basic little house in most areas of the country, and a very nice house in some areas.

That's without making any lifestyle adjustments or improving your debt situation: both of which would potentially allow you to do it faster.

You've clearly had money issues, and I suspect you need to take a good look at your finances and attitude to money: but a £60k combined salary should allow you to buy a house at least in the medium term. You might not manage it in the next 5 years, but it's not out of your reach.