New Mortgage adding Existing Debts

Ultimatechezz

Thanks,

Should I be more worried about getting on the property ladder or paying off debts?

I know I can't afford it now, but maybe in a year or so things may have changed (if i'm lucky!)

I worry in 5 years time the house could be worth another 10k!?

getmore4less

Not a lot you can do about that so why worry about a ladder that is at the top of the ladder you need to climb first.


Even 100% mortgage would be around £920pm over 40 years and if rates went up what then.

reality is you can't afford this house now, you might be able to get a cheaper one if that ladder is so important

One issue is the current landord may not be so keen on fixing things if they think you will buy it.

Spend time fixing the current problem, look at your spends and snowball the debts.

Ultimatechezz

I suppose so, I think it's the Mrs more worried about getting on the ladder as we haven't rented before and she feels like anything could happen.

The landlord owns the house outright and has done it up and is a decent chap (Already fixed 1/2 of the garden from a mess to new grass)

I spoke to him about buying it a while ago and he said get a value and we could have it.

I think because it's such a nice house with potential we are worried. But like you say, no chance at the moment!

Does it make sense to use the £25k to pay my debts then use the money I was paying on loans (£600) to smash the Mrs Debts and then start saving again? She doesn't want to do this but I feel that having no debts would be best in this situation...I suppose on the credit scores it will say settled.

getmore4less

If you had a house why did you sell it.

Ultimatechezz

The Mrs got offered a job in cumbria, where she is originally from, so couldn't turn it down as they are hard to come by and she was quite depressed and homesick, she trained as a nurse in Manchester and met me.

This current house is right off the M6 and between her sisters and mum by 15min or so so childcare is sorted and as I'm going to manchester twice a week it is good on that side...

Nothing else is good to rent and expensive to buy...

swindiff

I can see why she would not want to pay all your debt off first if this is savings that you have both made. Why not pay £12.5K off each of your debts rather than pay all yours off first?

Ultimatechezz

I said we could pay off her debts and she could give me what she was paying out to put on my debts. (£400)

I figured that if we payed my debt off 1st then I could pay her £600 and she could pay of the smaller credit card she has for £2800 in about 4 months maybe quicker with her regular payment as well, then she could put what she saved on that credit card with my payment to pay off the other cards?

squeeks

That's a lot of debt the two of you have racked up.

You could try speaking to a broker, but I suspect you'll have to pay down the debt first (credit cards and the likes) and see what kind of deposit you have left.

The existing fixed term loan agreements, such as the car loan will be knocked off from your monthly affordability by the mortgage lender.

The mortgage lender will also go through your income and expenditure over several months. If your outgoings are seen as too high to your income, even if you are not accruing debt at the moment, you may really struggle.

Thrugelmir

squeeks wrote: »

The mortgage lender will also go through your income and expenditure over several months. If your outgoings are seen as too high to your income, even if you are not accruing debt at the moment, you may really struggle.

The mortgage lender will be able to track the progressive increase in borrowing over the last 6 years using the datasets from the CRA's. Living beyond ones means will be very apparent.

Ultimatechezz

squeeks wrote: »

That's a lot of debt the two of you have racked up.

I know and i'm ashamed about how it's come about! It just happened one day! I just looked and though! what's has happened! I think getting the car/more petrol and moving house added alot to the issue, childcare didn't help in the past, buying what I wanted without worrying so much and excuses excuses...

On one hand I'm confident I can get out of it assuming I keep my job etc and on the other hand I know I need to get a property...or feel that way...

I feel it would take 2.5 years to clear the debts using the 25k and another 2.5 years to save up the 25k again...or take 5 years to pay off the loans anyway!