Mortgage Lending Sceanario

scoops82

Hi


Just a quick question - I can use calculators but as my GF has debt im not sure what impact that might have.


My Salary = 27000
Hers = 14000


She has outstanding debt of £3.5k but with a Debt Management company and pays no interest ( not sure what this agreement is called )


I currently have a house and a flat in my name
House Equity = £36k
Flat = £10k


What is the kind of borrowing limit / rates we could borrow at if we bought together? My nans house is going on the market soon and im just trying to see if it would be feasible. Her house would be about £225k.


Thanks
S
S

kingstreet

It's called a debt management plan and it means most mortgage lenders are not going to want to lend.

Speak to a broker as a matter of urgency.

David_White

I agree with Kingstreet, your main concern should be finding a lender that will allow the DMP.

Speaking to a specialist would be your best bet.

scoops82

That's what I though - that's also why we bought the house in my name only so we got a better interest rate on our current house.


We current pay 4.79% on a mortgage of £113000 but that will reduce in June to about 2.5% I think when we can re-mortgage.


We are quite happy as we are but I thought I should just check if it would be a possibility to borrow that much together and what kind of rate it would be - would it be 7%+ ??

ACG

Doing it jointly may be possible from an affordability point of view. Doing it solely in your name isnt going to be.

With regards to the rates, it will depend on the credit report - whether it shows as defaults and if so when those defaults were first registered. If over 2-3 years then there will be rates available under 5% I imagine.

If less than 2 years then your probably not going to be a million miles away, maybe 6%.

scoops82

Thanks - we have been together 2.50 years so i think the debt is probably about 5 years old but there is still £3.5k outstanding.


The rate makes quite a difference so just trying to see if we could afford the monthly payments for now before I think its actually a possibility.

Thrugelmir

scoops82 wrote: »

She has outstanding debt of £3.5k but with a Debt Management company and pays no interest ( not sure what this agreement is called )

Hence why lenders are reluctant to advance further monies to someone who has defaulted on debts previously. While the "loan" maybe interest free. The price paid is the impact on the individuals credit record. Nor will lenders who have been defaulted on, be likely to do further business after the debt is eventually cleared. There's no such thing as a free lunch.

ACG

5 years old, I think there will definitely be options.
I think under 5% would be achievable subject to the affordability, it is on the tight side but I think its on the right side.

scoops82

I completely agree and I am trying to get her to get it paid off ASAP - we just both have different attitudes to debt, I don't like it!


We have kept our financial affairs separate for now - I just know my Nans house will become available and I know I couldn't afford it on my own, hence asking what we would roughly be allowed to borrow and at roughly what rates.


I expect its out of our reach but I thought it was worth an aski before dismissing the idea.

DandelionPatrol

scoops82 wrote: »

I completely agree and I am trying to get her to get it paid off ASAP - we just both have different attitudes to debt, I don't like it!

Ultimately, if you do get a mortgage with her on it, the extra interest will outweigh the £3500 very quickly. Probably a year.