Debt and Mortgage advice

Mayweather96

Hello All,

I'm looking for some advice on how to handle my current situation and am particularly interested in how mortgage lenders look at debt / loans. 

I'm 27 and not in a good place financially. I've struggled with a gambling addiction for the last 3 years and as it stands sit £27k in debt. 
This is between 2 loans with NatWest and Admiral, and 2 credit cards with AMEX and Virgin. 

I earn around £50k per year and right now have 0 savings. 
I've worked out that a year to this day I can save approximately £20,000 should my circumstances not change and I actually stick to that. 
I'm putting certain things in place so my gambling addiction doesn't come between that - like locking my money away and signing up for GAMSTOP etc. 
Any further advice on that front would be helpful. 

If in a years time I do end up ready to buy my first home, I would have the £20k deposit but would also have around £18k debt. 
Assuming my partner adds to my £20k deposit with £10-£15k, and she would be on a £30k salary if things don't change, how likely are we to be considered by a high street lender? 
I don't have any defaults and pay everything on time. In the last 6 months I've applied for and taken out a good few loans to try and consolidate my debt as best I can. 
I assume they'll also want to know what the debt was from and I can't imagine they'll look at me that favourably if it's to cover gambling losses. 

This really has been the hardest few years of my life and I hope that if I get myself back on track, I won't be penalised for it and banks see that I'm a good saver and repay on time despite my problems. 

Any advice is more than welcome. 

Thank you 

MultiFuelBurner

So it is not unusual for first time buyers to have some debt. It will affect the total amount you can borrow but you should talk to a mortgage broker when ready and they can advise and present you with a number of mortgage options when you are both ready.

Just don't miss any payments and good luck with your addiction control. You won't have to declare what the debt was for. It will not be held against you.

kimwp

Probably better to ask the question on the mortgage board, they'll have a better view of how the lenders will view it. 

EssexHebridean

I would urge you to consider a longer lead-time before buying a property - simply to allow you more time to get the issues you've faced previously stabilised, and be fully "in recovery". Taking on mortgage payments at the point when you are still learning how recovery will fit for you will be stressful not only for you, but also for your partner, and you really need to be fully in a place where you both have confidence in your path to overcoming the addiction issues, I'd suggest. 

This would also have the advantage of meaning you could attack more of the outstanding debt and that would of course put you in a better position to get good mortgage deals, AND be in a position of having less of your income going out on debt payments each month too. Be VERY cautious of consolidation too - it can work, but more often than not, doesn't, as people perceive their original debt as having "gone away" and so are tempted to take out further debt on top. As you know exactly where your original debt came from this may be less of an issue for you. 

I wish you luck with moving your life forwards to a better and happier place - it takes a lot of courage to confess even to a "roomful of strangers" that you've struggled with those sorts of issues, and even more to commit to tackling them and moving past them, so well done, and the best of luck. 

ManyWays

Existing debts can dramatically reduce the amount a mortgage lender will lend. Play around with this mortgage calculator to see: https://www.santander.co.uk/personal/mortgages/mortgage-calculators/how-much-could-i-borrow

fatbelly

Essex,as usual gives sound advice. Giving yourself a longer timescale, say an extra 12 months, makes a lot of sense.

Going into a mortgsge debt free and with a deposit is putting yourself in the best position. You're only 27.

backinbusiness

Just to add - house prices are expected to fall for the next 18 - 24 months therefore you could get more bang for your buck then anyway.  Good luck OP.  BiB x