1st Time buyer with Debt

S

Sm1thers

Guest
Hey all,

Was looking for some advice if possible,
Myself and herself are looking at making our 1st purchase, owner occupier.

Trouble is at the moment we have about 30k debt between us,(australia and reconsolidating a stupid amount of times) about 30 months left before its clear and no savings to be honest.

Wages
Herself 26k, myself 37k (45k+ after bonuses)

What we want to do it get a loan to clear all debt and get a 100% mortgage also, but we are thinking no place will touch us after getting the clearing loan.

A) would anyone help us do both?
B) Get the auld pair to get a 30k loan as a "gift" , clear outstandings, make payments for them for 12 months and then remortgage to clear the 30k loan for them? (least favourable option)

All credit files are A1 - no pymnts ever missed ect

Appreciate any help/Advice or anyong thats been in a similar situation

Cheers
 
If you did get a loan to clear your debts, you'd still be in debt. You may still be considered for a mortgage but for much less than you'd get if you had no debts. Banks are concerned with your ability to repay the mortgage and if a large chunk of your salary was servicing a loan every month, then you'd have less money with which to pay a mortgage.

If you got an unofficial loan from parentals, it would show up on your bank statements and would probably raise questions. Unless you indicated it was a gift (I think there might be tax implications but not sure what, if any), it might look suspicious. I don't know if remortgaging after a year would work.

When myself and himself got offered a 100% mortgage, we had debts of €1400 (mine, 2 months away from clearing) and €9k (him - car loan just taken out) and we had to agree to clear them before drawdown. It's possible for us to do this because I was repaying my loan a year early anyway and himself had savings which could clear his loan if necessary. But without that, we would have been offered a hell of a lot less, even with such relatively small loans.

Sorry I'm not of more help.
 
are you in the credit union if so worth a try there, I do agree that you find a friend or family member if they can to help you, Then when you get approved for loan with extra 30K pay them asap
 
AFAIK, loans from family members are ignored by lending institutions for the purpose of calculating ability to repay.

So a loan from your folks would help in getting the mortgage, sure, but hoping for €30k equity on a 100% financed property in 12 months is very optimistic.

This has been discussed here before-make sure you know what you are doing, i.e. 100% mortgages may have strings attached, and some lenders will only be interested in you if your LTV is less than 92%. If it is still between 92% and 100%, then you are unlikely to be able to gain by remortgaging.

In your situation, I would aim to drive down that €30k to a more reasonable level-you could find yourselves under quite a bit of pressure in the next 12-18 months if you proceed as things stand.
 
if you keep rolling over the guts of one years takehome pay between the pair of ye i would advise you to deal with that smartly. As rent is generally a lot cheaper than buying you should look at it something like this

Assume

Pay loans €1k a month
Rent €1k a month

Outgoings €2k a month .

Therefore you are (in effect) practising paying a €446k mortgage over 30 years at 3.5% but there are no kiddies yet are there ??.

I estimate that running a sprog for its first 5 years costs about €1k a month (mainly creche but some other expenses too) . The government will only shell out 2 months running costs a year .

(some calculation data from)

http://www.jeacle.ie/mortgage

If you are already paying out €1500 each month between rent and repayments you are already simulating a €334k mortgage over 30 years at 3.5% interest. If you find you cannot get ahead with this then imagine what the mortgage would do to you even if you had NO DEBT ???
 
Thanks for the advice folks,

We are currently paying about 2k a month each with rent and loan repayments,

so were thinking 1500 of a mortgage and 500 repayments of the parents "gift" a month would be reasonable?

WE would still have anough cash left over to live reasonably well

as for Credit Union , dont they report fo the icb now anyways so anybody giving us a mortgage would be able to see it?
 
Sm1thers said:
Thanks for the advice folks,

We are currently paying about 2k a month each with rent and loan repayments,
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is that 2k or 4k between yiz. I am impressed at your dedication if its €4k . If its €2k its a bit minimalistic given your situation .
so were thinking 1500 of a mortgage and 500 repayments of the parents "gift" a month would be reasonable?
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how about costs like furniture and stamp duty (if applicable) . I still feel ye are a bit insolvent or cash flow strapped . What happens if the car (cars) die. I fear you are carrying a tad too much debt to incur more at least for another year . With that level of debt, 30k , 2 incomes are required to service it.

Try to get the levels down so that one income could service it.
WE would still have anough cash left over to live reasonably well
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hmm, its the living well that got ye 30k debt I would contend :p
as for Credit Union , dont they report fo the icb now anyways so anybody giving us a mortgage would be able to see it?
Click to expand...
many do but not all . it works two ways. If your loan repayment record is good in a year it shows you are collectively able to clatter debt when you set out to do so. Banks react better to the steady €2k a month on the statement than the 'lump sum' mysteriously appearing from somewhere.

I would still say you are a year away from the comfort zone and would counsel not acquiring more debt in the interim.

Do remember that If you squeze yourselves for a year to demolish that 30k debt you get an idea of how you both react to it , and whether you can discuss finance , and it will make you stronger as a unit or finish you . If it finishes you then you were evidently not meant to do a 30 year mortgage together.

If you cannot 'suffer' together for one year now you most certainly cannot suffer a 30 year mortgage stretch with kids thrown in 'somewhere' . Lovely little things but expensive.

Do think again sm1thers, I'd love to see you reactivate this thread in a years time with only 15k debt , or ideally a bit less (like 9.9k maybe) being carried forward by then .
 
Not all credit unions are registered with the ICB - check out this link to see if 1 you wish to borrow from is in this list:
[broken link removed]
 
Sm1thers said:
Thanks for the advice folks,

We are currently paying about 2k a month each with rent and loan repayments,

so were thinking 1500 of a mortgage and 500 repayments of the parents "gift" a month would be reasonable?

WE would still have anough cash left over to live reasonably well

as for Credit Union , dont they report fo the icb now anyways so anybody giving us a mortgage would be able to see it?
Click to expand...

It depends on the credit union, check their list
 
Thanks for the advice folks, maybe next April would be a better time, one loan is finished then freeing up about 360 a month to plough into the other loans.


Is there an average mortgage payment that people pay on their combined saleries or is the scale too varied,

ie couple earn 4k a month after tax combined, and pay out €1500 on a mortgage alone so 37.5% of their combined salary is taken up montly,

Thanks again, its nice for someone to look at the situation without rose tinted lenses!
 
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