Right to buy & existing debt

latburn

Hi all,

Is there anyone here that can offer some advice with regard to right to buy...

I’m currently trying to solve a couple of problems in the easiest way I can. The first is that I have a significant amount of unsecured debt totalling £30k. The second is that I could really do with purchasing a house to give me long term security. Although the debt total is high ie maxed out on everything, I am still just about able to maintain it and have never missed payments etc. The issue that caused the debt is now resolved and I’m now left mopping up the mess. I’m also in a very secure job that pays a fairly decent salary.

I have an opportunity to purchase my mother’s property as that’s where I still live and would qualify for the maximum discount meaning a £100,000 home can be bought for £30,000.
Is there a realistic solution here to bring my existing debt into a mortgage? Even after doing so, I would be nowhere near the true value of the house with the money I would owe and would easily be able to afford this. However, maintaining a mortgage and my debt would be difficult. My current credit score is quite low and presumably this is because I’m at my limit with the debts as opposed to payment problems.

I would value your opinions

unforeseen

Have you asked your mother whether she is willing to give up a secure tenancy? Especially as the joint buyer is already debt ridden so could put the house in danger.


Are you named on the tenancy?
Any mortgage will be joint with your mother IF you are both named on the tenancy.

If you are not named then not a hope of getting a mortgage

csgohan4

Are you ready to sacrifice a secured tenancy for an unsecured one?? Assuming you qualify. Do you know how much it is to maintain a property, especially if your the leaseholder?


What is in it for your mother? Your in debt, buying a house is not going to solve your debt. IN fact may affect your affordability



Should you fail to keep up mortgage payments, your mother and yourself will lose the house and both will be homeless and the council will not rehouse

Check out the debt free wannabee forum to hammer hose debts than think of being a property magnate



Have a look at why your debt, how much you earn and go from there

https://forums.moneysavingexpert.com/discussion/5856039/service-charge-being-billed-for-5000-major-works


https://forums.moneysavingexpert.com/discussion/5789909/new-roof

Keep_pedalling

You say your long term security, but this would reck you mother’s long term security, just forget the whole idea.

ACG

You can not do debt consolidation on a right to buy property for (I think) 5 years.

As others have said, this may solve your security (which I am not convinced it does) but it actually makes your mothers worse. If you are struggling to pay everything, why would you risk taking away your mothers secured tenancy? Look beyond the £70k "profit" and you must see this is not right for mum?

latburn

Thanks for your replies.

What I’m trying to do here is something that is smart and actually makes sense to solve a problem. In my original post, I could have gone into lots more details about how I ended up where I am but it would have bored the pants off people. So to answer a couple of questions...

I am a carer for my mother and have been for years. She is elderly and upset that she herself has never been in a position to leave me a property once she is no longer here and wants to see me secure in the future. So yes, she wants to do this.

I understand your concerns regarding the fact I have lots of debt and it’s easy (without knowing all the details) to imagine that because of this, it would happen again. However, as I mentioned the cause of this is now over and will definitely not happen again. I am in very secure employment and would be able to afford a mortgage on the property.

So my question really boils down to whether or not this is technically possible? A £100,000 house bought for £30,000. Unsecured debt of £30,000 would make the total cost borrowed against the house at £60,000. Clearly this is not ideal but does it sound sensible and realistic to do to achieve both aims? Can you carry debt into a mortgage in this way?

Apologies for my ignorance on such things but I really am just trying to be savvy here.

Finally, on a technicality if this matters to RTB, I am not named on the tenancy but have lived here all my adult life. And just in case, the fact that I mentioned my elderly mother throws up more questions, I can assure everyone she is fully aware and I’m most definitely not trying to do anything morally dodgy here!


‘

latburn

Apologies ACG, It looks like we both posted there at the same time. I’ve noted what you’ve said though about consolidation and hopefully what I posted answers some questions.

ACG

Appreciate our posts overlapped so I know most of your post is not geared towards me, but my answer makes no assumption on how the debt was built up. It could be anything, at this stage in the conversation I have assumed best case scenario.

Your mother wanting to be able to give you something is besides the point. The point is that if you buy the house and miss payments, the repossession process starts. Your mum is currently protected against large increases in rent, if there is a problem it is paid for by the council - what would you do if the boiler needed replacing? £2k more in loans/credit cards? That then adds to your expenditure and makes things even more difficult.

You have already admitted it is a struggle and you will not be able to consolidate the debt in to the mortgage or a secured loan. One of the reasons for that is if you were to default on the mortgage, the house is repossessed and the discount is paid back to the council. If the house has more debt secured against it - how can they get their discount back?

You/your mum are being swayed by the £70k where as what is actually important is your mums security whilst she is in a vulnerable position by the sounds of it.

HampshireH

Have you spoken to any lenders to see if you would even get a normal mortgage based on your history and affordibility? I know you say you can afford it but a lender may think differently.

Is that not the starting point once you know if you are even entitled to the RTB

You also need to factor in your mum and how a lender would view a joint ownership/application.

latburn

ACG,

Thanks for the honest reply and for answering the question re it not being possible to consolidate due to the discount etc. That being the case, it would seem the idea is a non starter but thank you.

I should say though for the benefit of any further discussion that my motives for the idea were legitimate and I would never have sought to undertake something like that if it meant any risk to the long term security of my mother. Very basic research suggests a now hypothetical £60k mortgage would have been easily affordable to me in the absence of any other unsecured debt. The points you raised about upkeep etc were also taken into account.

Anyway, thanks again for your helpful reply.

latburn

Thanks HampshireH,

When I posted my original question it was mainly to see if the idea was technically possible. I made initial enquires about RTB some years ago but never progressed it. If memory serves, we would have been eligible for the scheme.
I haven’t approached any lenders yet. This idea only came to me over the bank holiday weekend hence the initial post for a quick idea as to its potential. I think though that ACG covered it when we were both posting at the same time!

Thanks though for your reply.