Debt Free Wannabe. Where do i start?

23 Posts
Not sure if this is the right place to put this post, but I am looking for some advice as to becoming debt free. I have an overall debt of £7,500, which i am looking to clear as soon as possible as i am interested in getting out of the rental market and purchase my own property. I have previously been to the bank looking for help in relation to paying off my creditors and also help with a mortgage but on both occasions i have been turned away.
I have basically been given the opportunity to purchase the property that i currently live in from the landlord. The rate that i would be paying would be less than the market value of the property but even still the bank do not wish to help me.
What is the best way to clear my debt and increase my credit score so that i am able to complete the purchase.
I have basically been given the opportunity to purchase the property that i currently live in from the landlord. The rate that i would be paying would be less than the market value of the property but even still the bank do not wish to help me.
What is the best way to clear my debt and increase my credit score so that i am able to complete the purchase.
0
Latest MSE News and Guides
Replies
If you’re £7,500 in debt then I’m assuming you have no deposit to purchase a property so unless the landlord is prepared to wait then I suspect you won’t be in a position to buy the particular property you’re currently renting, but post the SOA and you’ll be able to get some proper advice
https://www.lemonfool.co.uk/financecalculators/soa.php
Do you have any savings? Presumably you have a deposit saved if you went to a bank asking for a mortgage?
August 2019: £28.8k
November 2020: £0 (0% interest)
My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320
<br>
First off, forget all thoughts of any sort of consolidation loan. It just pushes the debt sideways and in most cases leads to more overspending and thus more debt. Getting out of this situation without using more credit is the first step to understanding how to live debt free.
Then do a SOA. Everyone can help you trim the fat and get debt clearing. You need to get to the route of why you're in debt - not just how to get out of it quickly to essentially take on more debt. Then you need a savings plan to get the deposit stacked up. By then hopefully you'll look better to the mortgage providers.
I've waited to be fully debt free and am saving as much as possible before getting a mortgage. It's been a slog and sometimes gets me down, but god am I glad I didn't rush into it just because I wanted it when my control of my finances were still a mess. One step at a time. You can do this!
A phrase that has stuck with me and is so true... "debt is rarely an income problem, it's usually a budget problem."
The quote sounds obvious but is so true, your first aim needs to be developing a budget and trimming the fat to live comfortably within your means. That, people here will help with following your SOA.
Once debt is cleared to can begin to review your credit score and save for a deposit. Until, as hard as it is, I would hold exploring home ownership.
Save 12k in 2023 #35: £4250 / £12,000
Earn £365 on Prolific in 2023: £53.50 / £365
August 2019: £28.8k
November 2020: £0 (0% interest)
My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320
First, do a monthly budget and make a plan to gradually pay the debt off and then you will be able to save for a deposit. You will also need savings for costs like solicitors, stamp duty, search and survey costs. You can put an soa up here.
Save £12k in 2023 Challenge #8 £12,000/£6500
The 365 day 1p Challenge 2023 #1 £670.00/£100.00
The 365 £1 a day Challenge for Christmas 2023 #43 £1000/£400