Right to Buy to Permitted Developments to Defaults and everything in between!

csgohan4

OP if you have a good salary, why no deposit? and also with 2 debts ongoing, that shows to the bank your not good with your money.

You can't have a good salary and not have a good deposit, so define what you mean by a good salary? and what the house price is?

Nothing wrong with having a secure tenancy, buying a house is expensive from a maintenance point of view, you know the cost of a new boiler or roof?

elaine77_04

ACG wrote: »

- if I can’t take the money on top should I still take the RTB and then remortgage to release the equity to carry out the improvements once the defaults fall off and I can get a good deal?
- Not possible. There will be restrictions from the council.

- do I have a better chance of success with Barclays for the mortgage because the only debts I have are with them? (They were really kind about the issues as they could see my wage change as I’d banked with them forever and so they issued the defaults immediately and didn’t chase me for any money or anything as they could see the change in my wages themselves as I banked with them at the time).
- If you have 2 defaults with them, I would say that reduces your chance. You also have to put down a deposit with Barclays in addition to the discount (or you used to at least).

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I do not mean this to come across in a bad way, but your post reads a little bit arrogant and very much like you think because you have a 42% deposit you are an ideal customer. However the flip side is that you have not saved your deposit deposit and have 2 defaults.

What would these restrictions be? The only restriction they have mentioned to me is the pay back of the deposit if I sell the property within 5 years, not remortgage it.

When I spoke to Barclays about this in 2017 they advised that there are solutions that can be taken when the only thing on a credit check is in-house things with them. They didn’t elaborate on this though.

No problem; it’s not arrogance it’s just I have spoken to quite a few people I know (unofficially) who work in the field and those who have also been in a RTB position in the past and the resounding message was that, actually, RTB is very attractive to lenders due to the significant instant equity and therefore the significantly reduced risk of them ever losing any money by lending on the property. Barclays also told me this a number of years ago when it came up in an appointment I had with them at the time about something else. A 42% discount is an extremely significant deposit whichever way you want to look at it.

The defaults, however, are a problem and I accept this and have been very honest about them and that I acknowledge they will impact a lot of this. We can’t afford to just pay off the entire sum of debt that we owe in one payment (or clearly we would do this). We could afford to pay the settlement figures but I have been given financial advice which has advised me not to settle the accounts on the settlement offers because partially settled accounts are no better than defaults and can actually be worse for your credit rating than the defaults. It was a qualified financial adviser who told me this as well.

elaine77_04

csgohan4 wrote: »

OP if you have a good salary, why no deposit? and also with 2 debts ongoing, that shows to the bank your not good with your money.

You can't have a good salary and not have a good deposit, so define what you mean by a good salary? and what the house price is?

Nothing wrong with having a secure tenancy, buying a house is expensive from a maintenance point of view, you know the cost of a new boiler or roof?

Of course you can have a good salary and no deposit, why do you think so many people are stuck in privately rented properties? They earn plenty on a monthly basis but are unable to save the significant amounts for a bulk payment of a deposit all up front due to the cost of living day-to-day. The difference in the rent I pay and the private rent value in the area I live in is roughly £100 maximum a month and so it is hardly an earth shattering amount that would give us a significant advantage over a private renter.

As for me, when I had to take a significant cut in salary (or be made redundant) back in 2017, I used most of my savings to keep everything else running and had to sacrifice the two largest debts in order to do this with minimal impact on my family. I therefore do not have enough savings to go out and buy a property with a 42% deposit which is what I am entitled to if I just buy the property I have been living in for the past decade.

AdrianC

elaine77_04 wrote: »

Of course you can have a good salary and no deposit, why do you think so many people are stuck in privately rented properties? They earn plenty on a monthly basis but are unable to save the significant amounts for a bulk payment of a deposit all up front due to the cost of living day-to-day.

Odd definition of "earning plenty", if you're living so hand-to-mouth that you can't save anything.

elaine77_04

babyblade41 wrote: »

My worry would be the 2 defaults . Yes things do happen and you have been unable to save for a deposit and slipped up twice.

I really think you need to do an affordability statement for your own peace of mind.

Home ownership comes with lots of extra financial pitfalls and you seem to want to take out loans onto of loans with no real financial contingency plan.

If it were me I'd keep things as they are .. your affordability criteria as it stands, doesn't sound like you'd get a positive rate and then you want to add to it even more

Yes, the defaults are my worry too, not affordability. I have looked into that in as much detail as I can and if I mortgage for the 58% then the repayment would be less than what I’m paying in rent now and even if I mortgaged for the full value of the house it would still be affordable.

I’ve only “slipped up” once as the two debts were sacrificed and defaulted at the exact same time for the exact same reason and nothing like that has ever happened to me before and I dealt with it the best way I could with minimal impact on my other credit accounts and day-to-day financials.

Based on solely my income and financial information (not including the defaults, obviously), mortgage calculators etc.. show that I would be eligible for a mortgage of around £200k but my property even without the discount is probably worth around £130k maximum.

The overarching message from everyone I’ve spoken to (apart from on this forum) is that my paying rent is just dead money and more than what I could be paying in a mortgage.

elaine77_04

AdrianC wrote: »

Odd definition of "earning plenty", if you're living so hand-to-mouth that you can't save anything.

Nobody mentioned anyone living hand-to-mouth. Your post is unhelpful and ignores the fact that I have mentioned, many times, that the mortgage repayments may likely be less than what I am currently paying in rent. Not having savings in the bank of £20,000 plus does not mean you are living hand-to-mouth; what a strange remark.

I have more disposable income and a higher salary than a number of people I know who already have mortgages on properties because they got help with their deposit from family and/or were able to live rent free with family in order to save a deposit but they are now mortgaged to the hilt with little disposable income.

You can’t assume everyone’s current circumstances based on their previous circumstances or their background. I find on these forums that there is a lot of snobbery from people towards those discussing RTB in social housing or with any kind of mark on their credit rating ever. If only we were all so perfect.

csgohan4

elaine77_04 wrote: »

Of course you can have a good salary and no deposit, why do you think so many people are stuck in privately rented properties? They earn plenty on a monthly basis but are unable to save the significant amounts for a bulk payment of a deposit all up front due to the cost of living day-to-day. The difference in the rent I pay and the private rent value in the area I live in is roughly £100 maximum a month and so it is hardly an earth shattering amount that would give us a significant advantage over a private renter.

As for me, when I had to take a significant cut in salary (or be made redundant) back in 2017, I used most of my savings to keep everything else running and had to sacrifice the two largest debts in order to do this with minimal impact on my family. I therefore do not have enough savings to go out and buy a property with a 42% deposit which is what I am entitled to if I just buy the property I have been living in for the past decade.

Can you afford the solicitors fees, valuations e.t.c? they are not cheap either??

so basically you don't earn plenty, plenty of people who live in social housing go on to private rents and/or buy a house of their own not using RTB.

Seems affordability will be an issue for you potentially. have you really considered the costs of owning a house if your living on the edge every month.

If your boiler breaks down, that's easily 2k , can you afford that? or you going to take another loan? I had to help my parents with a recent new boiler and they owned their house fully.


you may be able to afford the mortgage now, but buying a house transcends the often spouted argument of it's cheaper than rent. Lenders stress test your mortgage up to +5% and mortgage rates are low for now but they can only go up

Can you please list your income, debt and house price and how much deposit you actually have for clarity.

We can only go on what you have put which is 'good salary' which means nothing and probably less so as you can't save a decent deposit.

elaine77_04

AnotherJoe wrote: »

Are you proposing to never pay these debts off ? Have the lenders written them off? Doesn't sound like it.
Why cant you buy the house now (if you can get a mortgage) and then wait until debts are paid / 5 year period is over then remortage then extend ?

Hi Anotherjoe; the lender (both debts are with my bank) have offered settlement figures to settle the accounts. We can afford to pay this but I have been advised by an IFA not to because partially settled debts are no better for my credit rating and can sometimes be worse. We can’t afford to pay one payment and clear the entire debts in full or we would obviously do this.

With regards to getting the mortgage and then remortgaging- this was one of my questions on my OP so was one of the options I was asking advice about.

babyblade41

elaine77_04 wrote: »

Nobody mentioned anyone living hand-to-mouth. Your post is unhelpful and ignores the fact that I have mentioned, many times, that the mortgage repayments may likely be less than what I am currently paying in rent. Not having savings in the bank of £20,000 plus does not mean you are living hand-to-mouth; what a strange remark.

I have more disposable income and a higher salary than a number of people I know who already have mortgages on properties because they got help with their deposit from family and/or were able to live rent free with family in order to save a deposit but they are now mortgaged to the hilt with little disposable income.

You can’t assume everyone’s current circumstances based on their previous circumstances or their background. I find on these forums that there is a lot of snobbery from people towards those discussing RTB in social housing or with any kind of mark on their credit rating ever. If only we were all so perfect.

I think that what people aren't understanding is that a deposit shows commitment and sacrificing luxuries to make that commitment

A good salary should allow even a small amount to be saved...
You seem to be contradicting everything and even is the true reality is not what you'd like to hear it's better to know than to go in blindly.

If I had the chance of social housing when I was young I would have jumped at the chance knowing what I know now.

Owning a house is financially exhausting and goes on forever ,

Those 2 defaults no matter how they were gained is indicative of what can lie ahead.. broken boiler, leaks, and all manners of minutiae that equate to home ownership.

If I was a lender I would seriously question your commitment and affordability especially with good salaries , that makes things even worse that money management isn't your forte... nothing to be ashamed of but will the responsibility of mortgages and loans be really the way forward at this moment .?

I would build up my credit again for at least a couple more years and build up the contingency pot .. showing lenders you can save as well would show you are managing finances well .

Interest rates may go up and to start off on a high rate already will put you on a bad footing from the start , one slight hiccup could push you over the edge entirely.

Look at the loss then, not just your credit rating but the roof over your head... is it a risk worth taking at this time ???

elaine77_04

csgohan4 wrote: »

Can you afford the solicitors fees, valuations e.t.c? they are not cheap either??

so basically you don't earn plenty, plenty of people who live in social housing go on to private rents and/or buy a house of their own not using RTB.

Seems affordability will be an issue for you potentially. have you really considered the costs of owning a house if your living on the edge every month.

If your boiler breaks down, that's easily 2k , can you afford that? or you going to take another loan? I had to help my parents with a recent new boiler and they owned their house fully.


you may be able to afford the mortgage now, but buying a house transcends the often spouted argument of it's cheaper than rent. Lenders stress test your mortgage up to +5% and mortgage rates are low for now but they can only go up

Can you please list your income, debt and house price and how much deposit you actually have for clarity.

We can only go on what you have put which is 'good salary' which means nothing and probably less so as you can't save a decent deposit.

Yes we have money put aside for solicitors/insurances etc and I’m not sure where you keep getting the idea that we have no money from? We don’t have enough cash for a 42% deposit which is what we are entitled to under RTB that’s all. Why would we shoot ourselves in the foot by mortgaging to the hilt on a 5-10% deposit when we are entitled to a discount which amounts to 42%?

I won’t share my salary on here as I don’t share this with anyone but professionals in a professional capacity but my total credit accounts (if I exclude the two defaults) amount to literally £5k maximum and are up to date and paid as monthly bills (mentioned in the OP). I have also already mentioned that, according to all of the mortgage calculators and advice available on MSE and online I am eligible for a mortgage of around £200k based on my financial information (excluding the defaults, obviously). My house is worth around £130k maximum before any discount is applied but I am awaiting the offer letter from the Council to confirm the exact figures.