Selling house to start over

Chasing_rainbows

Hi,
We (husband and wife) have a mortgage of Approx £115000 on property worth £185000 which we are selling.
We had been planning to buy again, but now know it's not possible at this time due to one of us having a poor credit history, payday loans, late payments and defaults some still outstanding.....so no mortgage lender would consider us understandably.
We have approx £15000 in debt which we plan to clear on completion, and then after legal and moving fees should be left with approx £45000 to be used as a deposit when we are next in a position to buy again.
We are happy enough to sell as we had been looking to move out of the area anyway, but obviously had been hoping to buy again straight away, not rent. However, given the circumstances we both feel quite happy to rent and plan to add to the deposit regular monthly savings using the money we no longer will be needing to pay on debt.
I'm unsure where best to out this 45k, (savings, current account, isa etc) keeping it all together or splitting it so any recommendations appreciated.
We were thinking after six to twelve months speaking with a broker and trying to get a mortgage as hopefully credit record will be looking healthier, but it's going to be a good few years, or even the full six Years for it all to drop off the file, so I don't know if six to twelve months is realistic or not really.
Any thoughts?

glentoran99

Chasing_rainbows wrote: »

Hi,
We (husband and wife) have a mortgage of Approx £115000 on property worth £185000 which we are selling.
We had been planning to buy again, but now know it's not possible at this time due to one of us having a poor credit history, payday loans, late payments and defaults some still outstanding.....so no mortgage lender would consider us understandably.
We have approx £15000 in debt which we plan to clear on completion, and then after legal and moving fees should be left with approx £45000 to be used as a deposit when we are next in a position to buy again.
We are happy enough to sell as we had been looking to move out of the area anyway, but obviously had been hoping to buy again straight away, not rent. However, given the circumstances we both feel quite happy to rent and plan to add to the deposit regular monthly savings using the money we no longer will be needing to pay on debt.
I'm unsure where best to out this 45k, (savings, current account, isa etc) keeping it all together or splitting it so any recommendations appreciated.
We were thinking after six to twelve months speaking with a broker and trying to get a mortgage as hopefully credit record will be looking healthier, but it's going to be a good few years, or even the full six Years for it all to drop off the file, so I don't know if six to twelve months is realistic or not really.
Any thoughts?

That wouldn't be true

Gru14

I guess it would depend how bad your credit rating really is.
In my experience it's not actually that difficult to get your credit rating improved but mortgage lenders don't rely just on the figure Experian give you for example but it's more about the general view of your financing and spending habits over the years. So, even if you had a 999 credit score or whatever in a years time, I would expect the bank would still look and see the defaults etc and be wary of lending.

It's very difficult, normally I'd say try to avoid going to rented but on the other hand paying off debts would be positive so I can see how difficult your decision is. Is there anyway you could afford to buy with a mortgage on just the one with the good credit? Mind you, i don't know how closely your spouses history affects you

warby68

Without knowing why one of you has a poor credit history, I would worry that a lump sum of cash in the Bank would be a dangerous temptation

Why not try the broker straight away or put off selling if 6-12m will make a difference?

Plus the usual challenges of the property market moving away from you.

moneyistooshorttomention

£15,000 debt to be cleared by 2 people = £7,500 each (well....basically....).

1. Are you both in full-time jobs?
2. What agegroup are you both?

Personally - in your position I'd plan finances around 2 full-time jobs (even if one of you currently has no job or only a part-time job - then I guess there would be "something" they could apply for??).

I would assume that sort of debt level could be cleared within 2 years? (based on 2 full-time salaries)??

If you lose owning a house and then have to try to get that back again later - then quite a bit of money would be wasted on:
- rent whilst you waited to be able to buy again
- costs involved in buying again.

bouicca21

You have no idea whether your £45 k will be an adequate deposit in the future. Unless you actually have to move for other reasons I'd be inclined to say stay, and get yourself over to the debt free wannabe board for a budget makeover. Getting yourself into good budgeting habits is more constructive than paying off debts in one fell swoop and then falling back into old ways.