First time buyer - Right to Buy

Jazzyb75

My very first post so apologies if the questions posed have been answered elsewhere.

I am currently a council tenant but looking to buy my first property using the right to buy scheme. The property is worth £270k, however I get a discount of £77k (which I will use as the deposit). Leaving me to get a mortgage of £193k.

My current rent is low and the montly amount would double for a mortgage payment.

I have £34k of debt on credit cards (all on 0%) and a loan from the family bank of around £5k.

In order to afford the higher monthly mortgage payments I will need to consolidate the credit card debt.

Q. Could I take out a secured loan (on the property) quickly after my mortgage to get the best rates?

Any other advice welcome re buying the house.

Thank you

J

Bluebirdman_of_Alcathays

34K Credit card debt - 5k debt to family- you want a mortgage, and then to follow it up with a secured loan. Who in their right mind would lend to you?!

Cheeky_Monkey

Are you sure that you will even get a mortgage with that amount of debt?

Jazzyb75

Yes - been approved. Got a decent credit rating and good salary in a long term job.

Bogalot

Jazzyb75 wrote: »

Yes - been approved. Got a decent credit rating and good salary in a long term job.

Any reason why you cannot buy somewhere within your means on the open market, or are you perhaps looking for the public purse to pay off your debts?

If you have a good salary why are you in so much debt? You need to look at this before buying anywhere, as it indicates you are living beyond your means.

teddysmum

You won't get a loan on a mortgaged property as it isn't yours to pledge until it's paid for.

Richard_Webster

Clear your credit card debt first. It is ridiculously high.

Pixie5740

Secured lenders usually look to have a first or second charge on the property. In your case the mortgage lender would have the first and the council the second so you'd need to find a lender willing to take a 3rd charge.

The amount of personal debt you have is quite high and it sounds as though you won't be able to afford the mortgage payments (let alone the other costs of home ownership) without consolidating your credit card debt over a longer period. Consolidating the credit card debt is daft for 2 reasons, 1) it's currently at 0% so any loan you get is going to be more expensive, and 2) paying debt over a longer term usually makes it more expensive than repaying over a shorter term.

If your debt has accrued to general overspending and living out-with your means means then you need to address this before continuing with this purchase. You can always RTB further down the line once you've got yourself sorted out.

nLdn

Doesnt look to me like the OP is really ready to own a property. Get your finances in order first.

glentoran99

Pixie5740 wrote: »

Secured lenders usually look to have a first or second charge on the property. In your case the mortgage lender would have the first and the council the second so you'd need to find a lender willing to take a 3rd charge.

The amount of personal debt you have is quite high and it sounds as though you won't be able to afford the mortgage payments (let alone the other costs of home ownership) without consolidating your credit card debt over a longer period. Consolidating the credit card debt is daft for 2 reasons, 1) it's currently at 0% so any loan you get is going to be more expensive, and 2) paying debt over a longer term usually makes it more expensive than repaying over a shorter term.

If your debt has accrued to general overspending and living out-with your means means then you need to address this before continuing with this purchase. You can always RTB further down the line once you've got yourself sorted out.

why would the council have a charge on it?

Cakeguts

You are actually thinking of doing this the wrong way round and it could end in disaster. The first thing you need to understand is that if you don't pay a mortgage you lose your home. Buying is not like renting. If you buy and lose your job if you do not have saving to cover the mortgage payments when you are out of work benefits will not pay them for you. The most you can expect is to have the interest paid.

From the amount of debt that you already have it is quite clear that you are not good at saving so you are not going to be able to save money to pay a mortgage if you are not working. This means that buying anywhere at the moment is extremely risky for you and you could become homeless.

You say that you have a good job so what you need to do first is to practice saving. In your case that will mean paying off the debt first. This should be relatively easy as you say your rent is low. It is also good practice for when you have a mortgage so you could use the extra money that you would pay if you had a mortgage to pay off the debt and they you could see how to budget on this amount before you have to. Realistically you would also need to save money on top of this if you own a property.

There is something else you need to consider. When you have got good at saving you could save for a deposit on a house on the open market. The benefits to society of doing this is that the council house you live in could then be passed onto a family who need a low rent and who can't afford to save for a deposit but who just need somewhere to live.