Would you give up on this house move?

[LittleHopes]

In a nightmare at the moment. Trying to buy a house through shared ownership for 60%. £105,000. I currently earn £44,000 along with a monthly bonus of £400 roughly from commission that I’ve had consistently monthly for a year. 10% deposit saved and ready. Not self employed. Employment history going back 8 years with no gaps. I’d be borrowing £94,500. Had one broker originally who ghosted, think wasn’t enough money in it for him.

1 defaults that is 6 years old being removed 1st November, No CCJ’s or anything like that. Have £4000 car loan left and £4000 in credit cards but paying these back hundreds over both minimum payments. I do have a £400 left from a student overdraft from when I was younger. It was originally £3000 and it will be paid off my the time the mortgage starts. No missed payments anywhere.

However, my broker cannot find me a lender. Was told initially that he knew lenders and it would be a “walk in the park”. Even when I questioned the default, he said due to age shouldn’t be an issue. He’s agreed to give it one more go.

I just feel so depleted- compared to my friend who recently got a mortgage despite having 2 4 year old CCJ’s and two missed credit card payments.

Broker has gone back to the drawing board but do you think I should give up and stay in rental for a few years til everything’s paid off? Use the deposit to clear everything perhaps and start again saving for a deposit?

So you’ve saved £10.5k for the deposit? How long did that take you? and how much have you put aside for solicitor fees etc?

Clear debts
Start saving again for the deposit

£5000 of it was inheritance after my auntie died and the rest I saved for, it took me about a year ish.

I think I would leave it until next year. Concentrate on paying off as much debt as possible in the meantime, especially the credit card as that will probably be the highest interest.

Don’t think I would be opting for a SO with a decent salary like yours.

Clear the overdraft ASAP. Those are catastrophic for your credit rating.

Focus on paying down the credit card, the car payment is usually looked at slightly differently.

Do NOT use the £400/month bonus in your affordability calculations - if you break your leg and are unable to work for a few months (surgery plus recovery, whatever) , you'll be in big trouble even if you can work from your sofa. Always factor that in separately.

The default - is that a single missed payment on something?

Have you checked your own credit rating? Are you on the electoral roll at your current address? Any other issues?

@LittleHopes I agree with the above that your priority at the moment should be clearing debt not saving for a deposit.

Clear as much debt as possible first. Then start saving.

. I do have a £400 left from a student overdraft from when I was younger.

i can’t get my head around why you didn’t clear this using just one month’s commission

How old are you OP?

It doesn't really look as if you have 10% deposit because you also have £8,000 in debts. I would think you need to pay down the debts a bit. What was the default and did you make it good?

from the bank’s perspective, you have £2k in savings op

Honestly, I would clear off all the credit card and overdraft debt, stick with rented, and continue saving.

I’m getting the impression that you are not that financially savvy OP, apologies if I’m wrong. You’ve had some really good financial advice on this thread anyway. I think if you follow it and pay off your debts before worrying about buying a house you will be in a much stronger position in the not too distant future.

I’ve become very financially savvy I’d say the past year. I’m 30, I pay £1200 in rent so realistically I needed to make sure priority bills were met first. I then attempted to snowball my debt but got advice to pay all of them over the minimum, and I’ve been paying off extra each month to get them down. The £400 is a balance from today. I can clear it, but broker said to keep hammering down on everything and that essentially it would take 2 months to show up as cleared. I don’t use the overdraft at all.

My default was 2 missed credit card payments 6 years ago (wiped off in 4 weeks). The overdraft and credit cards were from living and training as a young adult. Things like deposits years ago for houses. A car to get to work.

30

unanimous advice is pay off your debts op
save up
reapply

🤷

in your shoes i’d have bought a cheap car outright

Not necessarily an issue in itself. When we bought our house we had more debt than we had savings. The issue is affordability. Making payments on the car and the debt means less available each month to service the mortgage, and that’s what will be taken into account.

times have a-changed!

How long ago was that?

2 years. I also work in mortgages 😁. Affordability is key.

It would appear the op has failed on this front

and you were in a couple

this is a single person mortgage

a lot riskier from bank’s perspective

but you’d know that @WiserOlderElf !

Apologies you are younger than I assumed. It sounds like you made some mistakes when younger like running up a credit card bill but then I did the same in my 20s.

It sounds like you are doing well for your age. However I still think you should put your home buying goal on hold for a little longer to pay off your debts first.

Well yes, that’s exactly the point I was making. The fact that her savings only equate to £2k isn’t in itself a problem. The fact that her affordability doesn’t meet the requirements is a problem. You could have £50k in debt and it wouldn’t matter if you met the affordability criteria.

it is a problem

because that’s a 2% deposit!!

I wonder if the purchase property being shared ownership has any bearing on the lenders reluctance to give you a mortgage OP? I also agree with PP clear your debts first and then save for your deposit. Good luck I am sure you will get there in the end.

10% deposit saved and ready
The other problem is that you may have the basic 10% saved, but with so much unsecured personal debt you've got no leeway for the unexpected repairs and renewals that come with home ownership. You have neither the savings nor the credit available to cover the unexpected. That's not good - check your obligations towards maintaining the property under the shared ownership arrangements.