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First time buyer total newb... and complicated

(26 Posts)
Chukkab Tue 18-Apr-17 21:09:48

Hi all,
DH recently came into some money. He earns around 50k a year and I earn about 10.
We want to get our first house, but there are a few issues... firstlyq, we have about 15k of debt. I know ideally we'd pay this off first, but we need a home, DH is mid 40's, we have a baby, we already live in a one bed flat. Our plan is to have the debt in my name not his and have him buy the house in just his name and income. Is that possible? We are married but have never had a joint financial product.

Secondly, what are the chances of 5% deposits as an actual reality? Can we get one or do we need 10% min?

Lastly, how much, generally, could he borrow on what he earns? I find wildly differing amounts online!

Thanks all

Maggy74653 Tue 18-Apr-17 23:20:17

I definitely would not transfer all the debt into your name and take the mortgage out in just his name. That puts you in an incredibly risky position in the future if you were ever to separate.

The best thing I can advise is go through a mortgage broker. We did with our latest purchase and it was so simple. They will be able to tell you exactly what you can get and they take all the hard work away from the mortgage side of things (as long as you have a good one.)

Pradaqueen Wed 19-Apr-17 02:28:01

Definitely no to having the debt in your name and no name on the house!

Harumff Wed 19-Apr-17 07:03:39

You probably want to speak to a broker but to give you an idea why don't you do one of those affordability checkers with a mortgage provider online (e.g. we just got a good deal with Tesco bank and it started with me looking at it online). They will just ask your income (second what others said about keeping it joint) and will ask about debt and other outgoings and tell you how much you can borrow as well as deposit needed. Then you could take this to a broker and ask them to beat it.

Fancyaruck Wed 19-Apr-17 07:09:23

Can't recommend a mortgage broker enough - we've just moved into our first home and wouldn't have dreamt we'd be able to, all because of a wonderful mortgage broker.

MaverickSnoopy Wed 19-Apr-17 07:22:59

Agree that a mortgage broker is the way forward. We used one who got us a mortgage that we thought was out of our reach.

5% deposits are possible but they come with a higher rate of interest and your mortgage needs to make up the other 95% obviously. How much would you be looking to borrow?

Don't put the debt in your name. I'm no expert but you may get more mortgage pooling your salary as they multiply it and would then deduct the amount of debt. A broker would be able to advise though. Aside from anything else. Unless you want to be the only one repaying the debt then don't take it on.

user1471558436 Wed 19-Apr-17 07:24:52

How much is property on your area?

How much do you want to borrow?

We had to declare all income and debts. We took out a mortgage which covered our 10k debt

user1471558436 Wed 19-Apr-17 07:25:12

How much have you inherited?

Chukkab Wed 19-Apr-17 15:58:16

Thankyou all for your replies.

Yes, agreed we need to see a broker, I just assumed a mortgage is absoloutely a no go if we are holding debt. I have no issue putting it into my name, we have been together 20 years, I trust him implicitly, also my idea not his, thats not really the issue imo, but thanks for the concern! I just figured we would look more mortgagable if we buy in his name and income only and I hold the debt, it's really irrelevant whos name its in to us and we have back and forthed it before to use 0% interest deals...

We are ideally looking at properties around £200,000 (2 bed) He has £10,000 and we have £5000 in savings. I just dont know if we'd be laughed out of the place if we went to a broker!

Maggy74653 Wed 19-Apr-17 19:51:11

This is a bit strange but we are actually in a very similar position financially. We have a similar household income and a similar amount of debt due to car finance etc.

We have just purchased a house (2 weeks ago) for around £200,000 and had no problem at all getting that mortgage amount. In fact we weren't anywhere near the limit of what we could borrow. The only difference we did have was that we had a 10% deposit to put down.

I would speak to a mortgage broker. They definitely won't laugh at you. I'd try and find one through recommendation from someone else rather than just google though. Get the mortgage in both of your names and I honestly wouldn't worry about the debt. I think your biggest sticking point may be the 5% deposit.

NapQueen Wed 19-Apr-17 19:53:34

Is your debt earning interest?

If so id use the 15k you both have to pay it off completely. Live as frugally as possible for 1 year to save for a deposit.

MrsPacMan Wed 19-Apr-17 19:55:56

The debt doesn't matter so much as how you've accrued it and your ability to make the loan repayments alongside the mortgage payments etc, it's more about affordability, so keep the debt between you and apply in joint names

MrsPacMan Wed 19-Apr-17 19:56:52

napqueen is spot on on this point, I misread and thought you had the debt on a 0%

Maggy74653 Wed 19-Apr-17 20:15:19

I'd be more inclined to secure the mortgage and house purchase now whilst interest rates are low and the pay the debt off as you have been doing using the 0% interest offers. But everyone likes to do things differently.

It's also worth considering how your finances will change going from renting to a mortgage? We actually found we saved a lot of money by paying a mortgage instead of renting. This could help you bring your debt down quicker if you chose to buy rather than pay it off.

Chukkab Wed 19-Apr-17 21:15:47

The debt is predominantly on 0% interest. I shimmy them around (it's on credit cards) to take advantage of the offers.

Staying in a one bed flat for another year with a LO isn't really an option (well not a great option anyway) starting to try and save 20k from scratch just won't happen... I feel this is our only opportunity!

Ok, DH is going to make a few calls at the weekend to speak to some brokers. We could possibly make it up to 10% with a little help from the family, we'll fess all up to the brokers and see if they can come up with anything.

Thanks for all the input... Maggy, especially reassuring given the similar situation, beacon of hope!

MissDuke Wed 19-Apr-17 22:18:28

Have you managed to pay off any debt or is it continuing to accrue?

Chukkab Wed 19-Apr-17 22:28:15

Yeah it's going down

Miniwookie Thu 20-Apr-17 08:33:17

Debt is OK with a mortgage but £15k is a lot to have on credit cards as a proportion of your income. If I was a lender I would be questioning your ability to manage your finances, but as pp have said contact a mortgage broker for advise.

thenewaveragebear1983 Thu 20-Apr-17 13:36:16

He can use only his income for the mortgage purpose but you can still be a 50% owner of the property.

Don't put all your debts into your name.

Can't you consolidate your debts into your mortgage, use just his income for affordability calculations, and have you named as 50% owner on the paperwork?

Chukkab Thu 20-Apr-17 16:01:32

Thankyou for your replies. Ok yes, I hadn't even thought about being on the mortgage but it not based on my income. That's sounds good.

Have been given the number of a local broker highly recommended by a friend. DH going to call tomorrow and explain our situation and see if anything can be done.

Also I didn't realise you could consolidate your debt into a mortgage, like I said, total newb. As for it being on credit cards, I kept it there as I could get 0% deals, do you think they'd see it more favourably if it were a loan? Though not sure we could get an unsecured loan to cover that.
Thanks again for all your help.

Maggy74653 Fri 21-Apr-17 09:46:43

I may be wrong but i seem to recall that when a friend went for a mortgage with a large amount of debt (think nearer 30k!) they preferred it on credit cards to loans as it was more flexible in terms of paying back. Your mortgage broker will be able to give you the best advice about this though smile

Chukkab Fri 21-Apr-17 10:15:27

Loving your positivity Maggy! grin

ShortLass Fri 21-Apr-17 15:57:14

Credit card debt will cost 2-3% of the loan each time you move it across to a new card, so it's not "free" debt. It's always a good idea to pay off as soon as you can.

DeleteOrDecay Fri 21-Apr-17 16:04:55

If so id use the 15k you both have to pay it off completely. Live as frugally as possible for 1 year to save for a deposit.

Okay but I think it might take op longer than one year to save up the amount they would need.

We are sort of in a similar position so following this thread with interest.

Chukkab Fri 21-Apr-17 20:10:59

Very aware it's not 'free' debt. It's a fucking albatross!

Of course in an ideal world we'd pay it off first and save up... that's not a reality though, unless I've got years and years to muck about with.

We're in a one bed flat with a baby. Need this to work out. I'm so worried it's gonna make it impossible...

Got a telephone consultation with the broker tomorrow. Anxiety levels - high.

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