Saving for a deposit

rachelheels

We are working really hard to pay off some debts and save for a deposit too

We have several £200-£500 debts, we are paying one very payday so will be debt free within a year (except car finance which will take longer, but all payments being met and will be paid off before we even apply for a mortgage.

alongside this we are also saving some money each month.

we have decided for now to put the money into premium bonds. We know there is a chance of no returns, but with interest rates so low and the chance of a reward we decided this suited us best.

realistically we think we’ll have the £50k individual limit by the end of 2023 which is when we intend to apply, as all outstanding defaults and a ccj will be off our credit files by then.

will mortgage companies consider the source of a deposit being premium bonds as an issue/unusual in any way?

I don’t want that to cause us any issues 

K_S

rachelheels said:

will mortgage companies consider the source of a deposit being premium bonds as an issue/unusual in any way?

No, I've never seen it to be an issue. Actually, PBs are a pretty popular parking place for deposits, albeit on a relatively temporary basis.

rachelheels

Thanks really appreciate your reply. We know there is a risk of no return but equally the potential rewards are there. We already have £2k, which I know to some is meaningless but to us is huge progress, we have never had any savings before at all.

our credit ratings are trashed but all defaults will be paid off this year, all of them will be 3 years old or older when we want a mortgage, we have 4 ccjs between us, 1 is repaid In full, 2 will be repaid in full at the end of January. The last one is a big one, 8k, and 6 years is up in may 2023 We don’t intend to pay this one off but will only approach a broker after this date, which is also around the time we anticipate having the deposit saved 

dimbo61

Have you looked at LISA ISA,s ?
Could be a good way to boost your savings is you fit the criteria ?

Thrugelmir

rachelheels said:

The last one is a big one, 8k, and 6 years is up in may 2023 We don’t intend to pay this one off 

What's plan B if this backfires?  8k is worth pursuing. 

ACG

Ive only ever come across someones deposit in premium bonds once in 9-10 years. But it was not a problem, you just get a print out of the balance. 

K_S

ACG said:

Ive only ever come across someones deposit in premium bonds once in 9-10 years. But it was not a problem, you just get a print out of the balance. 

@ACG Wow, that is surprising to hear. That's not been my experience at all. Quite a few of my clients have had PBs as the last/final resting place for their deposit before going into the property.

rachelheels

Thrugelmir said:

rachelheels said:

The last one is a big one, 8k, and 6 years is up in may 2023 We don’t intend to pay this one off 

What's plan B if this backfires?  8k is worth pursuing. 

The ccj was granted in may 2017, they have had our address from day one but done nothing to enforce it. 

We know there is a risk of a bailiff visit but we have no assets they could seize outside, and always keep all doors etc locked.

if they believed they’d get it I don’t think they’d have wasted this long?

it was a consumer credit regulated finance agreement so they can’t escalate to high court

iys far from ideal but we are riding this one out, we should have contested it more vigorously as we genuinely believe we were wronged, but we don’t have the inclination to battle it, we’re more than halfway to it being off our credit files

Vikipollard

And if they do enforce, though you say you have no assets, you will have to declare your premium bonds savings, or surely that is fraud.  But you already intend to not mention the CCJ(s) in your mortgage application from your previous posts, even though you have been told they may ask "Have you ever had a CCJ".
If you can afford to save £50k in three years (on the salaries you state you and your husband earn), then do the right thing and pay off your debt.

FTB_Help

100% agree with vikipollard and Thrugelmir, the whole house buying/ mort app is so stressful, trust me you don't want things like this looming over  - you will be constantly worried and thinking what if through out the whole process and don't want your dream house to be taken off you at the last minute for £8k.
And as vikipollard said if you're in a place where you can save 50k in 3 yrs then surely you should do the right thing and pay off your debts

rachelheels

Vikipollard said:

And if they do enforce, though you say you have no assets, you will have to declare your premium bonds savings, or surely that is fraud.  But you already intend to not mention the CCJ(s) in your mortgage application from your previous posts, even though you have been told they may ask "Have you ever had a CCJ".
If you can afford to save £50k in three years (on the salaries you state you and your husband earn), then do the right thing and pay off your debt.

I’ve never in my life heard of a bailiff asking what assets I have, I’ve encountered a few over other issues and never been asked this.

So easy solution is we put the bonds into the kids names :-)