7% interest rate on mortgage wwyd?

[Cindbelly]

Hi all, I am looking for some advice please.
We are looking into buying our council property (I am aware this is frowned on in mumsnet but please don't judge me for that)
We desperately need a 3 bed and cannot exchange, our only option is to buy the property we are renting and look to convert - this could be done for roughly 3k. (Builders in the family so I'm not concerned about that)

I've not got the greatest credit history and have about 11k personal debt, however we have a 40% discount which they will take as a deposit. We've had a principle agreement offer but at 7% and they won't cover the 11k we owe.
Monthly repayments are more than double our current rent. Which would be tight but we could do.
Broker has advised that we take the offer and in 2 years remortgage at a different rate. He seems to think that in 2 years our credit file will have improved. Time is not on our side, we are 35 and 41 this year.
But I'm torn..
I can't see how if the 11k is still outstanding in 2 years (no chance to pay it off in full with the new higher mortgage payments) our credit rating would improve, and if we should go for it or not.
Sorry if that doesn't make too much sense, posting in my phone - but I would really appreciate some views on this. Neither me nor DH have any experience about buying houses.

Have you tried other brokers/banks etc to make sure you’d the getting the best deal possible? Even if your circumstances are awful, perhaps 4 or 5% is achievable?

For your credit rating go improve, the loan doesn’t need to be full paid off but you’d need to pay all your commitments to time incl loan or mortgage repayments etc if you’re behind with stuff, you’ll have awful credit rating.

However, what’s making you so desperate? Couldn’t you just focus on paying down the loan as much as possible and wait for your credit rating to get a bit better before going through with the purchase?

I guess the rush is because of
A) our ages and B) the need for a 3bed.

Also I wanted to do some improvements to the house and with a 5% rate (or less) we could have afforded to. But the 7% has really put a dent in the works. And I'm not paying out major refurbishments for a rented place.
With a 5% we could have also paid off the 11k in 2 years

That's a difficult one , you say you need a bigger house , before anything see if you can get planning permission first , you don't want to buy it and find it's not possible. I'm not sure if through right to buy you have the same permitted development as usual.
As for the interest rates we are at a very low point in historic rates they may move up, that 7% could turn into 10% . I don't know your exact circumstances but it's sounds financially very tight.

Try Kensington mortgages www.kmc.co.uk/mortgages/residential/failed-credit-score

Thanks all.. gosh 7% rising to 10% is very worrying.

You're still quite young and shouldn't have a problem securing a 25- year mortgage in a year's time.

If you can pay off 11k with a mortgage far exceeding your rent, I'm sure that you can pay it off in less time while continuing to rent. And then apply for a mortgage and do the improvements. Even if you have another child on the way or something, you could just manage for a little longer. A year or two isn't that long in the greater scheme of things.

Thanks all, the offer was based on the property value estimated of £300,000 but the house needs a LOT of work (mostly cosmetic - structurally it's sound) so I've put in for a final figure, I guess I will just wait till I've had the actual value and see if that changes the mortgage offer (crosses fingers)

A year to wait seems a looong time right now