Help to Buy Scotland with debt

Determinedtobedebtfree

Hello,

I’m hoping for some help re what’s my best course of action to get a mortgage.

My husband and I live in Scotland and we have seen a new build house for £199,000. The development is only about to start and we were hoping to be in a position to buy around the end of the year. We’ve been saving since Christmas and we’ve managed to put aside nearly £6,000 so far and we will have the rest of the 5% deposit by late summer/early autumn.

However we have a couple of questions about whether we will qualify for Help to Buy and around some existing debt.

Our take home pay is £63,000 (I am on a salary of £43,500 and my husband earns £19,500 per year). Would this be OK for Help to Buy, I wasn’t sure if there was an upper salary limit? I keep reading that you won’t qualify if you could raise the mortgage without Help to Buy. We are in private rented accommodation, I have lived in the house since 2011 and my husband a couple of years later and we’ve never missed a rent payment. We have both previously owned a home with other partners.

On that note, my husband has zero personal debt but has a credit card which he uses occasionally and pays off in full to keep his credit rating high. I have quite a lot of personal debt, a loan of £14k at an 6.9% APR and 3 credit cards with a balance totalling around £20k. My credit cards are all 0% but I am only paying just over the minimum, so will need to trf again once their deals finish.

The personal debt is a hangover from a few things including a nasty break-up with a previous partner in 2011 which left me with significant high rate debt, being made redundant soon after and then having to take a lower paid job to pay the bills. I have a good credit rating with zero missed payments (it was a struggle but I worked two jobs for a while). It’s not an excellent rating as my utilization is quite high. I’m on a good salary now and we can afford a mortgage on Help to Buy but I’m worried it’s a pipe dream with my level of debt.
The loan for £14k was over 3 years and I’m 6 months in, so my payments are quite high £468 per month.

My bank has offered me a loan for £35k to pay off everything at a rate of 5.9%, this would be over a period of 7 years (just over £500 per month). This would mean I was only making one payment per month. My question is would this look better to a mortgage company if I only have one loan? If I took it out now, I would have made 6 months of payments before applying for a mortgage. This would also allow us to save an additional £400 per month towards deposit/moving costs/overpayments and once we’ve moved, I would use this money to just make overpayments to the loan. I don’t want to do it if lenders would look unfavourably on a personal loan for consolidation as I don’t want to ruin our chances to buy. I would also retain one of the credit cards but have the limit reduced to £2,500 and use it occasionally as my husband does (just to keep my score up). Any help would be greatly appreciated. Thanks