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 doesn't sound very appealing to me. Are you responsible for 100% of the maintenance? That doesn't sound fair if you are paying rent on 40%.

Can you look into buying 100%? Perhaps the SO aspect reduces the number of available funding sources.

I would pay off the overdraft and credit card with your savings and keep making your regular car payments. Wait till the default has gone from your record and review your credit rating on a monthly basis. Save hard and hopefully you can try again in 9-12 months.

No it’s not, because you can take on a mortgage with debt. There is no requirement to pay off the £8k debt before taking on the mortgage. The full £10k is able to be used as a deposit. The £8k still exists as debt. So if the person applying for the mortgage could afford the debt repayments as well as the mortgage repayments, it wouldn’t be a problem. Obviously in this case they’ve judged that the OP can’t, under the affordability criteria. You could have a deposit of £30k and debts of £50k (so with your logic a deposit of - £20k) but if your incomings were sufficient to meet the affordability criteria it wouldn’t be a barrier to getting a mortgage.

Obviously this is all dependent on the individual lender’s criteria, and everyone’s is different, but my minor initial point was that having debt isn’t in itself a barrier to getting a mortgage.

That is true.

Though I still think it would be better for OP to clear as much debt as possible before getting a mortgage, to be sensible.

This could be both an affordability and product availability issue.
Fewer lenders will lend on Shared Ownership properties so your choice of mortgage product is restricted.
On a side note have you considered both the pros and cons of Shared Ownership. The leasehold element and the fact that you pay rent to a Registered Housing Provider but get nothing for it in return is definitely a negative of the scheme.

not when the debt is equivalent to 80% of the pretty meagre deposit being put forth by the applicant

as the evidence would appear to confirm in this case

You could have a deposit of £30k and debts of £50k (so with your logic a deposit of - £20k) but if your incomings were sufficient to meet the affordability criteria it wouldn’t be a barrier to getting a mortgage.

15 years ago? sure
Now? Nope

Hello all, yes have considered the pros and cons of shared ownership and with it being 65% it’s more ownership so good. I would use it like friends have as a stepping stone to build up equity for a few years and then use that equity for a deposit on a freehold.

Just tired of paying £1200 pound on rent for a two bed house in a midlands city when I could be paying a lot less in rent and mortgage for the same size property so at least nudging towards something.

I’ll admit I’ve not had the best financial advice. Spent my 20’s trying to scrape together to train enough to be a social worker, had to move house a lot due to landlords selling etc so urgent deposits were needed hence the CC debt. I’m really trying to turn it around and haven’t missed a payment in 6 years.

i wish they taught more about this kind of stuff in school. My parents are the typical bought their house for 8 pence on one wage mum stayed home boomers so they understand but don’t completely get how difficult it is for young people these days.

i wish they taught more about this kind of stuff in school. My parents are the typical bought their house for 8 pence on one wage mum stayed home boomers so they understand but don’t completely get how difficult it is for young people these days.

Many of us boomers do get it. We have children too. We (not all though) want prices to fall back to a more reasonable earnings ratio. It'll never go back to 3 times average single person earnings because women now work. But it should go back to no more than 5 times.

And yes, you are right, we have been asking for more practical lessons for years . Mortgages, credit, pensions ad investments are far more important to most people than geometry. Algebra is really important though!!!

I am surprised a broker can't place that. I am a shared ownership broker and if that is the only adverse that should be high street rates.

And by the way OP take no notice of those perfect people who have no trouble getting mortgages and never have any debt at any point- it's very difficult these days

I don't think the default should be an issue as it will fall off your credit rating. So as long as you've not applied yet it should be fine. I think your combined issues are that you have wiped out most of your savings with three different types of debt and lenders are more reluctant to lend on shared ownership as they're harder to sell and you have the rent bit to pay too. They are also an expensive logistical nightmare to sell so be careful not to trap yourself into something. Have you got solicitors fees on top

Also Martin Lewis actually does or did a financial education course covering loads of this

Hi OP, I very recently bought a SO property with very adverse credit (4 defaults, which are unsettled with payments ongoing) and my broker got me a mortgage with Pepper Money, which is an adverse lender but it's only temporary until my defaults drop off.

This was with TMP. Have you tried speaking to them? They were really good and spent so much time on my case!