What are our options? Opinions please?

DaniS

I’m looking for a bit advice if I may, please.

This may be a little lengthy so please bear with me.

My partner and I would love to get on the property ladder, however he has quite adverse credit.
A satisfied CCJ for £400 that is 18 months old. He also has 4 defaults that are zero balance as they’ve all had full and final settlements. They are due to come off in the next 1-2 years.

My credit rating is very good, almost at excellent.

I have the following (as at today):
Nationwide Loan: £17k o/s
Nationwide CC : £4800 0%
Tesco CC: £3800 0%

Between me and my partner, we earn over £90k per year. My income is fixed £45k, partners is made up of a very good basic salary (£35k) and the remainder is commission but it’s consistently around the £2k per month mark.

My partners salary is paid into my bank account (we work for the same company) and has been for almost 2 years as we couldn’t get a joint account due to his credit.

We have one dependant and one due in 3 weeks so we will have 2 dependants. I am returning to work full-time in November and will only receive SMP for 1 month as I have accrued holiday.

In terms of how we work our accounts – everything comes out of my account with the exception of child maintenance £550 per month for my partners child from a previous relationship and mobile phone.

We don’t have childcare costs as grandparents help us out, we both have company cars (so pay tax on benefit in kind) but we do have fuel expenses.

My debt repayments are around £750 per month and our bills/commitments are £1300 per month. Then it’s just food etc on top of that.

We pretty much spend what we like but we do have some savings, around £7k at the moment. We could save more per month if we ‘tighten the belt’.

Affordability wise, we can clearly afford to own our own home and I think I’m just wondering what (if anything) our options are. Obviously I’m not talking in the next couple months, but really over maybe 12-18 months. Credit cards will be paid off by then and I know the ideal situation is to pay the loan off first, but I’d love to know if I could do it without having to part with that money, rather using it towards a deposit.

Also, am I better to look at a sole application as partner credit so bad or would we be considered due to our good income?

Anyway, if you’ve made it this far – thank you. And thank you for any advice.

ACG

If you can get a 10% deposit, there should be high street lenders for a joint application.

You could look at a sole application, but not includeing £45k worth of income is going to make a massive difference to your maximum purchase price. As a general rule you would be looking at a Mortgage of around £180-200k plus deposit solely. Or £360-400k plus deposit jointly.

Speak to a broker, realistically a joint application is not going to fit with every lender.

Thrugelmir

Time will heal your partners credit record. Unless you've obtained an exceptionally good interest rate. Then paying down the NW loan is far better than saving. I would keep the £7k you have as emergency savings though.

You earn a good income between the 2 of you. Seems as if you control the household finances. So if you put your minds to it. There's no reason reason why you cannot both repay debt and build savings/

You could both open HTB ISA's and save towards your deposit that way.

As an aside. While you say your Grandparents cover all childcare issues. Is this realistic for many years? Young children are very demanding. High level of care is very demanding. Not so easy as one gets older on a full time basis.

getmore4less

work out where the £5600pm net income is going.

some might be pension, the cars will use a bit and the £550pm CM

there is only a couple of £k going on bills and debt then some food

at least £2k plus going some where else.

Then there is the £25k over spending to get the debt in the first place.

At £750pm you are looking at 3years to pay of the debt.

Affordability wise, we can clearly afford to own our own home

your current affordability is you can't afford your own home you are spending it all.

You need to reorganise your cashflow to free up the mortgage payment and build up a deposit.

Once you know how much free cashflow you have you can work out how much you can borrow.

Any current rent will form part of that mortgage payment


how much are the sort of plces you would want to buy?

DaniS

Thank you for your responses.

To answer a couple of the questions. Both sets of our parents will have children 1-2 days each and my partner has 1 day off in the week as he works weekends. I work from home 1 day per week when it's quiet in the office, although technically I shouldn't have the children with me as it doesn't really constitute 'working'.

As I said in my original post, we do spend quite liberally on things without thinking 'because we can'.. For example, we've just purchased our double pushchair for the impending arrival - £1.5K. I'm a bridesmaid in Mexico in October so we've just paid for that too - £4.5K. If we need it, we buy it and if we want it, I buy it. I actually don't like the sound of myself saying that!
But turning 30, having my children now I've quickly come to realise that had I been more sensible in the past, I could have my own home by now.

As for the £25K debt....it used to be much, much more. To the tune of £45K and it wasn't overspending it was a toxic, silly relationship of yesteryear in which I'm still paying the price. This was before I earned a good salary. It's safe to say, I've learned the hard way.

We're not looking for a grand home, we can get a nice 3 bedroom semi-detached for around £175K.

Thrugelmir

DaniS wrote: »

But turning 30, having my children now I've quickly come to realise that had I been more sensible in the past, I could have my own home by now.

We're not looking for a grand home, we can get a nice 3 bedroom semi-detached for around £175K.

Look forwards. Not backwards. Saving money can become addictive once there's a goal to aim for and the reality gets closer. With sensible expectations you shouldn't have much trouble. Surprising how many people simply live their lives buried up to their necks in debt.