Mortgage advice - Feeling utterly overwhelmed

[Bulbousbob]

I’m sure I’ll feel better tomorrow but right now I’m on the edge. Can’t stop crying and can’t see any way out. I’m a lone parent. Had to move away from where I lived to get my teenage son out of the wrong crowd. That’s adding to my stress. I have a flat with very little equity. Maybe £40k if I’m lucky. I earn around £44k but I work two jobs, have credit card debts if £22k but on 0 percent Interest and I’m paying them off. I need to sell my flat to buy somewhere in the town I’ve moved to but it’s expensive here and I don’t know if my mortgage provider will lend me more because of my debts. I’ve never been late or defaulted on payments. My credit score is good. Can anyone guide me to where to go next in terms of finding out how much, if anything I could borrow to help me buy. My current mortgage is £82k

Do you have a broker?

No. I’ve messaged friends for referrals. Won’t that cost me more money?

A lot of banks have an online calculator to give you a rough idea, but as you have debt it would be a good idea to speak to a broker - they’ll have a good idea of who’s likely to accept you and what different lenders criteria’s are.
How much do you think you’d need to buy in the new town?

I should add my current mortgage is fixed for 10 years. Does that not mean I have to stay with them?

Well if you earn £44K you’ll likely be able to borrow £44 x 3 so £133K

They make take off what you own so £110 depending on how secure your jobs are

What price are you wanting to buy at?

Small 2 beds here can sell for around £160k

Most banks have mortgage calculators on their websites. They will ask you for your monthly outgoings so that is where you put your card and/or loan payments as well as standard stuff like utilities etc..

I also highly recommend Money Saving Expert's advice on mortgages and debts. It offers very sound and detailed advice.

Thanks green tulips. In that case it’s unlikely I’ll get a two bed here. Might need to go for one bed but not great with a teenage boy.

Ouch that’s great. I’ll go on there now.

You’d need to check the terms and conditions. Mine has a reducing scale of penalties showing how much they penalise you depending how soon into the term you leave.

You’d be best phoning them and seeing what the position is. If you have to stay with them as the penalties for leaving are high, they may offer you sufficient funds after your debt is paid to get your new pad.

I know you said you’ve got £22k on 0% but that rate will end at some point and then you’ll be back onto their APR rate again? I’d just want to pay that whole debt off if it were me and start with a clean slate. Or at least the cards that would be due up soon. Just for the peace of mind!

The best mortgage deals are for those who have 20% or more deposit. Start looking at what flats cost in the new area and see what you can afford using the banks calculator online.

This could work out really well for you so don’t panic. Once you have the facts you can start making decisions on how to proceed.

We're moving soon as had around £20k debts and £45k equity. The debts really reduced the amount we could borrow so ended up paying off the debts and having a smaller deposit because that way we could buy a mortgage expensive property. It might be worth exploring both options with a mortgage broker.

Santander intermedies calculator (you can Google it) on a 44k salary, 1 financial dependant, 22k credit debt gives an affordability of 170k.

That's a really basic calculation though on the bare minimum, but if you go to the calculator yourself and run through it you can get a better idea.

As long as you fill it out correctly, it should be pretty accurate as the Santander underwriters use the same calculator when processing mortgages.

Phone L&C (London and Country I think?) they will take all information about your salary, debts, equity etc, workout what you can afford, point you in the direction of mortgages, and it's all free.

Thank you. I’m looking at flats now. They’re so expensive. But there are some affordable. I’m sure it will be fine. I’m just struggling generally. I’m annoyed at myself for being so much in debt. Too many stresses. I’m much less resilient than I used to be. I’m worried my flat won’t sell for as much as I’d hope. I paid £120K for it 7 years ago and they are still selling for that.

Find a broker. Most don't charge you as they get commission. They are invaluable when you have something like debt.

Thanks so much everyone. I’ve stopped crying 🙂. It’s been a very tricky time. I’m sure it won’t be as bad as I think. I’m doing everything I can to get myself sorted. I should add my son is 18 and job hunting so he’s less of a dependent than he used to be. Hopefully he will be earning soon and can make a small contribution.

I second the advice to look on Money Saving Expert. Sign up to the forum there too.

The first thing you should do is speak to your current lender. If you are stuck on a 10 year fix with a penalty for leaving early you may be able to get around this by "porting" your mortgage. Your lender will also give a view on the max they would increase your mortgage by. That will give you a sense of how much you will have to play with if you can stick with that lender.

If things aren't rosy with your lender, definitely talk to a broker. I would do that anyway. You should look for an all of the market broker who will get their fees from the lender rather than you. In that way you won't have fees to pay just for consulting them. They will have a really good sense of how likely it is you will get a mortgage and how much.

If affordability is an issue generally consider part rent part buy schemes. Also consider one bed properties with a big living room which could become a kitchen diner or that have space to extend into the loft or out the back which you can do when you have the funds.

I definitely agree with the advice to use a broker. They can look at the whole of the market and can access deals not available to the general public.

@cantarina there are loads of shared ownership schemes round here. I didn’t think you could have a current mortgage? I thought it was for first time buyers. That could be an option.

@bulbousbob you'd have to enquire of the schemes in your area. They are not only for first time buyers though although some will be. And not just new builds - you should be able to find properties for sale on a part own/part buy basis where the previous part owner wants to move on.

L&C broker online or telephone are helpful. I used them to cut down on options and point me in right direction.

@Bulbousbob if you can get online check out Habito. Totally free mortgage broker. Just got our mortgage through them. Was very easy. you can take pictures of documents in your phone and upload them.

Thank you

Don’t forget that the price you can pay will include your equity.