Mortgage preparation advice

strummergirl

Hi I am hoping for some advice please. My partner and I have stable careers, joint income of approximately 60k and would like to buy a property in the region of 130k with a 5% deposit ideally. My partner has debts of 10k on a few credit cards (from a previous failed business venture) which we are currently repaying at 500 per month. We are also saving a small amount so by next year we hope to have cleared the debt and have around 5k in a LISA. Can anyone please advise if it’s worth a hope of trying for a mortgage while we still have any balances owing on the cards? Should we save more or clear the debt faster?we have no defaults and very good credit otherwise.  We are late 30’s and feeling  the pressure to get on the ladder soon! Thank you. 

Emzlyz

I have 6k credit card debt. Myself and my partner earn around 45k between us (before overtime and bonuses) I also have a car on finance but we just applied for a mortgage at 170k with 5% deposit. Try a mortgage calculator (I used Halifax) and it will give you an idea of how much a bank is willing to lend based on income and debt. Or speak to a mortgage advisor

AdrianC

Pay the debt off before saving. What's the interest rate on those cards?

fiveacre

5% deposit on £130k is only £6.5k i.e. less than your outstanding credit card debt. That would mean you're effectively borrowing your deposit at the moment. At 95% LTV the lender is going to look very carefully at all other outgoings, I think you should aim to clear the debt and save the 5%. No harm in getting an agreement in principle to find out though (make sure you use a lender who carries out only a soft credit search).

Don't forget you'll also need money for solicitors fees, surveys, etc.

K_S

strummergirl said:

Hi I am hoping for some advice please. My partner and I have stable careers, joint income of approximately 60k and would like to buy a property in the region of 130k with a 5% deposit ideally. My partner has debts of 10k on a few credit cards (from a previous failed business venture) which we are currently repaying at 500 per month. We are also saving a small amount so by next year we hope to have cleared the debt and have around 5k in a LISA. Can anyone please advise if it’s worth a hope of trying for a mortgage while we still have any balances owing on the cards? Should we save more or clear the debt faster?we have no defaults and very good credit otherwise.  We are late 30’s and feeling  the pressure to get on the ladder soon! Thank you. 

@strummergirl 60k income, clean credit history, looking to borrow less than 2.5 times income, debt of 10k, only in your late 30s (so no issues with term). From the limited info in your post, the only thing stopping you from getting a 95% LTV mortgage is the 6.5k deposit.

As soon as you have sufficient cash savings for the 6.5k deposit plus buying costs you should be ok to look at your mortgage options. The 10k background debt is not likely to be an impediment. Good luck!

strummergirl

K_S said:

strummergirl said:

Hi I am hoping for some advice please. My partner and I have stable careers, joint income of approximately 60k and would like to buy a property in the region of 130k with a 5% deposit ideally. My partner has debts of 10k on a few credit cards (from a previous failed business venture) which we are currently repaying at 500 per month. We are also saving a small amount so by next year we hope to have cleared the debt and have around 5k in a LISA. Can anyone please advise if it’s worth a hope of trying for a mortgage while we still have any balances owing on the cards? Should we save more or clear the debt faster?we have no defaults and very good credit otherwise.  We are late 30’s and feeling  the pressure to get on the ladder soon! Thank you. 

@strummergirl 60k income, clean credit history, looking to borrow less than 2.5 times income, debt of 10k, only in your late 30s (so no issues with term). From the limited info in your post, the only thing stopping you from getting a 95% LTV mortgage is the 6.5k deposit.

As soon as you have sufficient cash savings for the 6.5k deposit plus buying costs you should be ok to look at your mortgage options. The 10k background debt is not likely to be an impediment. Good luck!

Wow that’s brilliant thank you so much. I didn’t think this would be a possibility! 

strummergirl

Sorry I can’t quote PP for some reason but all 0%