Im confused if im in with a chance or not?

Bubbles2012

Hi All

Im 34, husband is 55 😱.

Currently, between us we are in 28K of debt. We rent a property and have a 4 year old.

Some recent events have made us realise we NEED to buy a house. Law is changing with landlords, rent will go higher and we need security for me and my boy when my husband retires.

Im interested in the help to buy scheme and have seen a house im interested in but i need to raise the deposit first. (House hasnt been built yet).
Ive spoken the the builders financial adviser who organises the mortgages and the help to buy scheme.
He seemed very optimistic that he can help us.
He knows all of out goings and incomings, debt and the fact ive been on a DMP for 12 years.
On my credit report, i have 1 default (not from DMP as the defaults from DMP are long gone from my report) which was from September 2013 and he has said as long as we apply for the mortgage AFTER september (6 years passed) we should get a mortgage
He also thinks he would be able to get us a mortgage for until my Husband is 75.
He has since sent the email to myself and to the property developers accepting us on the scheme and said we should be likely for a mortgage.

Should i be cautiously optimistic?

The bank also said they could (in principal) give us a mortgage. She said she couldnt see my DMP on my file at all but doesnt mean they wont find it if they choose to dig.

The problem is, we dont have the time to pay off the DMP as hubby will be too old and we wont be able to afford the repayments.

Can i be hopeful that next year, once we have saved a 5% deposit, that this IS something we can do?

middleclassbutpoor

If you can save 5%, wouldnt that be better for you to reduce your debts at this stage before getting further into debt?

Likewise, have you considered the need for having money for all the associated buying costs such as legals, surveys etc?

When you become an owner-occupier you also become responsible for repairs etc. so you need to factor this into your overall decision around renting v buying.

That said, if you think it's the right thing for you, then you should trust your Adviser. However I wouldn't use any 'professional' recommended by the builder because they are likely to be less independent to you.

There are changes to the HTB coming up which you may need to consider depending on when you actually are in a position to proceed. It kicks in around 2 years for now so may not impact but if your saving takes longer than expected, it's worth knowing https://www.helptobuy.gov.uk/equity-loan/further-guidance/

csgohan4

That amount of debt will seriously impact on your affordability. You need to hit that debt first.

If you ran up debt renting, the costs of owning a house are alot more in terms of maintenance.

the question is can you afford to buy a house?

Sanne

Mortgage until your husband is 75 is definitely possible - we’ve (I’m 34, and hubby 47) just done it at the end of last year. Does your husband pay into a pension? This was a requirement for most lenders, at least one also stipulated that the job needed to be non-physical.

Will you be able to maintain the mortgage payments - particularly once interest rates rise - once your husband retires?

I also second the on-going repair costs, with a new build there’ll be less tonstart with but it might then hit you when your husband retires (think boiler in 8/9 years etc). Will you be able to cover these costs with a reduced household income?

Cakeguts

Buying is more expensive than renting and you need to be good at saving. When you own a house you become responsible for all of the repairs. Also there are no benefits that will pay a mortgage. If you don't pay the mortgage the house could be repossessed. What all of this means is that you have to be very very good at saving because not only do you have to have saved to pay for the repairs but you also have to have saved to pay the mortgage if either of you lose your job.



A couple with 28K of debt don't appear to be good at saving. This will make you high risk of losing your home if you don't pay the mortgage.

Bubbles2012

This is annoying, everytime i go to reply, it kicks me out!

babyblade41

Sad to say but if you have trouble saving whilst renting then maybe owning a house and the running cost, repairs etc could be one step too far.

I hate to be brutal but at both your ages you should have accrued a reasonable amount of savings well before now , and if I was going to lend you a serious amount of money I'd want to know why you hadn't

Bubbles2012

You! wouldnt even believe how many times i have written this out!

Agreed, we havent been the best savers and should of done this 10 years ago. But we have recently had a light bulb moment and we now realise we need to do this... now.

Unfortunately, if we decided to pay of some/all debt, we then wouldnt be in a position to buy at all as we would not be able to afford the monthly repayments.

Both the bank and the HTB financial advisor did their calculations based on the debt we have now, and have given us a figure to work with and how much our monthly repayments would be. The HTB would be more affordable for us as the interest of the loan doesnt kick in for 5 years, by that point, we will be debt free (apart from the mortgage) and we then will be able to afford the interest of the loan and if the interest rises on the mortgage (depending how much)

We currently pay £800 a month on rent and £300 on the car which ends in 8 months so would be able to afford up to £1100 on mortgages repayments.

As for savings, we will be able to save some once we have moved in. As for the job, people take buy houses everyday not knowing exactly how safe their job is and luckily for us, the kind of industry we work in, something would come up if we did lose it.

I'm scared to buy a house, but im really scared of our future if we continue to rent...

Bubbles2012

I dont know what to do ��

Regardless of how we got to where we are now, surely its what we do now that counts..

middleclassbutpoor

Save up as much as you can and make the decision when you have 5% - no point making any other decision at the moment.

babyblade41

To be a bit more positive get the deposit saved up and literally go from there, until you are in a position to approach a mortgage company you can't move forward