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Mortgage Advice...

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
not sure which forum this has to go in so i'll start here.

not sure many people here will have any advice but worth a try.

Basically, im considering purchasing a house, would be a first time buyer etc...

just got a few questions, i currently have some outstanding debts, which i presume is going to effect the success of me getting a mortgage?? i have about £6k worth of debt (never missed any payments however), is it possible for a mortgage lender to settle these as part of the mortgage or am i screwed until these are payed?

thanks for the advice

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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I don't know any of that but what i do know is that if they are togive you one, you wouldn't be able to get as good a mortgage as you normally would with tha debt. Ie if you would normally be able to get a 100k one on your earnings you won't be able to get that much if it makes sense.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    The debts are somewhat irrelevant to your chances of getting a mortgage. However, as most lenders wont lend more than 95% loan to value you'll need a deposit, which, if you've got a large amount of debt, you probably don't have.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    my understanding is thats not necessarily true...as i have existing debt, doesnt particularly mean i have a bad credit reference, so shouldnt make much difference to the amount i could get, i just want to get everything rolled into one payment reall.y
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    How on earth is it possible to buy a house these days if you earn less that about 30 grand a year?
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Mist wrote:
    The debts are somewhat irrelevant to your chances of getting a mortgage. However, as most lenders wont lend more than 95% loan to value you'll need a deposit, which, if you've got a large amount of debt, you probably don't have.

    aye i thought about that, but ive also seen 100% and sometimes more than that mortgages..might be able to wangle a deposit from family tho.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    theres a few nice houses in my current area for less than 70k which aint too bad, plus its one of the better areas of town, thought bradford would be pretty much the same with it being another hole like this
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    koe_182 wrote:
    theres a few nice houses in my current area for less than 70k which aint too bad, plus its one of the better areas of town, thought bradford would be pretty much the same with it being another hole like this

    Unless you live on one of the estates, or one of the ghettos, it's pretty expensive.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    bad seed wrote:
    How on earth is it possible to buy a house these days if you earn less that about 30 grand a year?

    joint mortgage :yes:

    koe - if you've made all your payments on time you'll probably have quite a good credit rating, but they will take the loan payments into account as part of your outgoings, so the max amount they offer you would be less than if you were debt-free.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kaffrin wrote:
    joint mortgage :yes:

    Not if you're single :p
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    yer the single person has no chance these days, personally im single, but i just need to get out, and i refuse to get involved in renting really :(
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    koe_182 wrote:
    yer the single person has no chance these days, personally im single, but i just need to get out, and i refuse to get involved in renting really :(

    Landlords are scum. You're just chucking money at their investment.
    And they push the price of houses further.

    They should increase stamp duty on 2nd homes (a lot).
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    bad seed wrote:
    Not if you're single :p

    you could buy with a friend or family member. theoretically.

    but yeah, there's not a snowball's hope in hell i'd have been able to afford to buy on my own.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kaffrin wrote:
    you could buy with a friend or family member. theoretically.

    but yeah, there's not a snowball's hope in hell i'd have been able to afford to buy on my own.

    I saw a back to back in Pudsey advertised for £120,000 the other day!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You lender will show you how much you could borrow with the debt and how much without the debt, obviously if you did not have the debt you could borrow more as you would have a smaller monthly expenditure.

    You will get a mortgage with debts however you should consider paying your debt off using the mortgage money. If you explain to your mortgage lender that this is what you intend to do with the money they will usually lend you the higher amount of mortgage money providing you agree to show them proof of paying off those debts within 30days of completing your purchase. Therefore you might be able to borrow £110k instead of £100k, you will pay off your six grand and have £104k to buy a property.

    If you get a mortgage that will let you overpay per month without charge, you could then use the money that you save from not paying off debt each month (ie interest) and overpay say £100 of capital each month on the mortgage. Over five years that would be £6k which in the long run could save you thousands depending on your type of mortgage. My boyfriend and I have a mortgage with Nationwide and we can overpay by up to £500 without being charged and if at any point we want to take that money back...we can!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    ive been looking at 2bedroom terraces and also some flats, which i may just about be able to afford, if not i'll be rounding up a mate to come joint. Theres a nice flat which is less than £50k but ive seen it advertised for ages and wouldnt want the same prob when i came to sell.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pink_Angel wrote:
    You lender will show you how much you could borrow with the debt and how much without the debt, obviously if you did not have the debt you could borrow more as you would have a smaller monthly expenditure.

    You will get a mortgage with debts however you should consider paying your debt off using the mortgage money. If you explain to your mortgage lender that this is what you intend to do with the money they will usually lend you the higher amount of mortgage money providing you agree to show them proof of paying off those debts within 30days of completing your purchase. Therefore you might be able to borrow £110k instead of £100k, you will pay off your six grand and have £104k to buy a property.

    If you get a mortgage that will let you overpay per month without charge, you could then use the money that you save from not paying off debt each month (ie interest) and overpay say £100 of capital each month on the mortgage. Over five years that would be £6k which in the long run could save you thousands depending on your type of mortgage. My boyfriend and I have a mortgage with Nationwide and we can overpay by up to £500 without being charged and if at any point we want to take that money back...we can!


    thats what i wanted to know if i could use part of the mortgage to pay off existing debt, because if i got that paid off i'd be laughing on disposable income as i have fully paid off my car, only other thing is my phone bill. the debt is still from my student days, overdraft and credit cards that i wanna get rid of but struggling to do it.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    bad seed wrote:
    I saw a back to back in Pudsey advertised for £120,000 the other day!

    that's cheap, for leeds. even the kind of houses like ours (concrete pre-fab, ex-council) are now going for £130,000+ three years ago they were selling for around £40,000. it's totally ridiculous.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    bad seed wrote:
    I saw a back to back in Pudsey advertised for £120,000 the other day!

    Come to Coventry!

    There are still places here where the average property price is 37 grand. Not that you'd wanna live there mind.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    koe_182 wrote:
    thats what i wanted to know if i could use part of the mortgage to pay off existing debt, because if i got that paid off i'd be laughing on disposable income as i have fully paid off my car, only other thing is my phone bill. the debt is still from my student days, overdraft and credit cards that i wanna get rid of but struggling to do it.

    You should make enquiries, phone some lenders and get some appointments sorted. They should all be able to indicate to you what they can offer. They can draw up a mortgage in premise and this will give you a clear idea of repayment costs, interest rates, whether than can give you a larger amount providing you pay off your debt. But like I said with what you save you should perhaps use some of it to overpay because you will get those mortgage repayments down and pay off the mortgage quicker and its a good way of saving if you need to. If you have any student loan, that is not included in debt as it is taken before tax.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Bear in mind that if you add your debt to your mortgage then it could cost you more over the long term. Though you will probably notice it less.

    You can get over 95% or whatever, but the rates you get offered will generally be higher.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pink_Angel wrote:
    You should make enquiries, phone some lenders and get some appointments sorted. They should all be able to indicate to you what they can offer. They can draw up a mortgage in premise and this will give you a clear idea of repayment costs, interest rates, whether than can give you a larger amount providing you pay off your debt. But like I said with what you save you should perhaps use some of it to overpay because you will get those mortgage repayments down and pay off the mortgage quicker and its a good way of saving if you need to. If you have any student loan, that is not included in debt as it is taken before tax.

    yeah ive made sure not to include my student loan.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    koe_182 wrote:
    my understanding is thats not necessarily true...as i have existing debt, doesnt particularly mean i have a bad credit reference, so shouldnt make much difference to the amount i could get, i just want to get everything rolled into one payment reall.y

    Of course it matters, they need to take into account how much of your money is already taken elsewhere. I was told this my a mortgage adviser too.
    Think about it, they can't work out that on your income you could say get a 100k house if you pay say 10k a year in loans. That would just be stupid as you wouldn't be able to afford it.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    See if you can find yourself a independant financial advisor - ours didnt' charge us anything as he got a kick back from the mortgage company for arrangeing the mortgage for us so see if you can find one who does a similar thing and they should be able to tell you what your options are.

    Also I know i said this yesterday but if you want to rent out your second bedroom the mortgage company will often give you more money on the baisis of the extra income you will get from it. I know someone who got a 3 bedroomed house on this baisis when he wouldnt' have normally been able to afford a small flat buy himself.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    yeah thats what i was thinking neffy, been looking at 2 bed places with a prospect to renting a room out to a mate.

    i really dont think i wanna get involved in a joint mortgage at the moment because it could be an arse when one of us decided to settle down with a woman or something.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Wyetry wrote:
    Also I know i said this yesterday but if you want to rent out your second bedroom the mortgage company will often give you more money on the baisis of the extra income you will get from it. I know someone who got a 3 bedroomed house on this baisis when he wouldnt' have normally been able to afford a small flat buy himself.

    That is interesting.
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