6K loan towards flat purchase
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Hello
I am wondering what my chances are of getting a loan. It's unlikely, but is it a total non-starter?
The background:
I am finally in the fortunate position of being able to buy somewhere to live. It means moving to a new city. I have 50K in cash, and I am now saving for buying costs. In order to buy in a slightly less gritty area I think I need another 5 to 6K.
However, I don't earn very much. I only have the 50K thanks to living with a parent for the last five years and saving 20K plus getting an inheritance. I have been very lucky. In addition, my credit history is not great, since I have defaults from a credit card from nearly six years ago when I was unemployed/in very erratic zero hours low paid work. I know there's six years before your credit history is clean again, but is that six years since paying off the debt or six years since the date of default? Because I paid off the debt about five years ago.
I don't want to wait and save for another year. I really have put my life on hold for a long time and I'm not getting any younger. So if I can't get a loan I will just buy where I can. But I thought I might chance my arm at borrowing a small amount. Is it a total non-starter? Should I talk to my bank? I will need to leave my job to move, so that is a headache in itself. Ideally I would rent in the new city first, but that might preclude the loan. I do earn a small amount online as well, which I can continue to do, but that is just enough to cover my expenses while I move, pay rent on a room for a few months and look for a job.
I'm guessing I can't get a mortgage for such a small amount and I'm not mortgage worthy anyway. I think I am willing to take the risk of paying back the loan, because I won't be paying rent or mortgage and the repayments will be a lot less than that. I will have to pay all bills on my own for the first time ever, and put money aside for maintenance etc. I know I'm probably just being greedy.
I am wondering what my chances are of getting a loan. It's unlikely, but is it a total non-starter?
The background:
I am finally in the fortunate position of being able to buy somewhere to live. It means moving to a new city. I have 50K in cash, and I am now saving for buying costs. In order to buy in a slightly less gritty area I think I need another 5 to 6K.
However, I don't earn very much. I only have the 50K thanks to living with a parent for the last five years and saving 20K plus getting an inheritance. I have been very lucky. In addition, my credit history is not great, since I have defaults from a credit card from nearly six years ago when I was unemployed/in very erratic zero hours low paid work. I know there's six years before your credit history is clean again, but is that six years since paying off the debt or six years since the date of default? Because I paid off the debt about five years ago.
I don't want to wait and save for another year. I really have put my life on hold for a long time and I'm not getting any younger. So if I can't get a loan I will just buy where I can. But I thought I might chance my arm at borrowing a small amount. Is it a total non-starter? Should I talk to my bank? I will need to leave my job to move, so that is a headache in itself. Ideally I would rent in the new city first, but that might preclude the loan. I do earn a small amount online as well, which I can continue to do, but that is just enough to cover my expenses while I move, pay rent on a room for a few months and look for a job.
I'm guessing I can't get a mortgage for such a small amount and I'm not mortgage worthy anyway. I think I am willing to take the risk of paying back the loan, because I won't be paying rent or mortgage and the repayments will be a lot less than that. I will have to pay all bills on my own for the first time ever, and put money aside for maintenance etc. I know I'm probably just being greedy.
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Comments
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Try an eligibility checker. Be aware that some lenders won't lend for property purchases, outside of secured loans.
Accounts stay on your file for 6 years from default.0 -
It looks like you have to some degree, but make sure you go in to this with your eyes open.
You say you've been living at home for 5 years and have saved £20K. That is a great achievement, don't get me wrong, however it suggests that you have had a disposable income to save of, on average, £77 per week.
When you move out, do you think that £77 per week will be enough to cover all of your new utilities, food, decorating, insurance, council tax etc?
Also, the the repayment of a £6K loan, even if taken over 10 years at a good interest rate will cost £15 per week, bringing your £77 down to £62.
You may have been paying a lot of board, or had additional outgoings which you didn't need to cut back on when you were living at home, but it's just food for thought.• The rich buy assets.
• The poor only have expenses.
• The middle class buy liabilities they think are assets.
Robert T. Kiyosaki0 -
Have you checked your credit files ?
You say you will also be changing jobs, have you found another job to go to ?
Can I ask would you buy somewhere first, quit your job and look for another one ?
Why not apply for jobs that are close to where you would like to live and then think about moving, why cant you stay where you are for work, is it the distance ?0 -
You want to buy a property for c£55k?
I assume you've found something for that low a figure but have you checked whether there are maintenance fees e.g. leasehold/freehold?
Could you earn more?
Would it be worth using that money to retrain for another career or to step up in the one you're already in?0 -
There's nothing against getting a mortgage for £6k. You'd need to ask around and see which lenders will do so, and may be worth checking with a broker.0
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Borrow the minimum amount on a mortgage and then use whatever is left of your cash to overpay the mortgage down to £6k. One or two mortgage lenders allows unlimited over payments during a fixed period for example.
Only difference is that rate will most likely be lower and the loan is secured on your property.0 -
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How can you not find a decent flat in another city with a £50k deposit?0
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How can you not find a decent flat in another city with a £50k deposit?
I believe the OP wants to buy a place outright for 50K (or a slightly better place for 56K with the personal loan).• The rich buy assets.
• The poor only have expenses.
• The middle class buy liabilities they think are assets.
Robert T. Kiyosaki0
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