Restore credit rating to move house

R

ROConnor

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Age: 41, married male, no child dependants

Annual gross income from employment or profession: Student, occasional work from freelancing

Monthly take-home pay: c. € 0, wife pays bills at the moment

In general are you: (a) spending more than you earn, or (b) saving?
saving

Rough estimate of value of home: €200,000

Amount outstanding on your mortgage: €70,000 repaying c.€450 a month.

What interest rate are you paying? 4.25% variable rate.

Other borrowings – car loans/personal loans etc.: 16000 home improvement, credit card and student loan. 8000 outstanding in property maintenance fees

Do you pay off your full credit card balance each month? No credit card, outstanding loans combined with debt collection agency

Savings and investments: All used up. Wife has savings of 40000.

Do you own any investment or other property? No

Do you have a pension scheme? No

Life insurance: No


What specific question do you have or what issues are of concern to you?

After work contracts drying up in mid 2012, I started missing payments on loan and mortgage. Went back to college to upskill using savings and jobseekers with springboard funding. JA recently ended. Since 2012, I have had made ad-hoc payments to outstanding loan, mostly keeping with agreed repayment arrangements but with quite a few missed payments. Outstanding personal loans are being handled by a Debt recovery agency. Mortgage arrears were recapitalised and have 15 months unbroken repayments. Outstanding property maintenance fees have been repackaged as a judgement order.

All the bad news aside, am hoping to get a decent job after graduation this May and start paying back personal loan and start towards paying property fees. During the downturn, I got married and am hoping to start a family over the next few years and move to a house, ( currently in small apartment )

I'd love to know the best way of repairing my credit to get a mortgage to move. Cost of house will be approx 340,000. Estimated combined earnings in 2 years will be 75000.
 
Where is your wife living?

If she is living with you, would she not contribute to the costs?

You could sell her part of the house for €40,000 and use it to pay off your debts and arrears. The sooner you pay them off, the sooner you can get back on track, but it seems to be at least 5 years away.

The alternative is as follows
1) Sell your apartment and pay off your various debts. This will leave you with €100k.
2) Your wife has €40k
3) Could she get a mortgage on her own for €200k? Has she a gross income of about €60k?

Seems unlikely if your combined income will be €75k

So sell a share in your house to your wife and pay off your debts and reduce your mortgage.

Brendan
 
Thanks for the reply Brendan.

She lives with me in the apartment, although the mortgage is in my name. I haven't asked her as these were debts I accumulated beforehand and was hoping to put off shared finances ( in terms of debt servicing ) until we both bought a house together. However as you say, this maybe a long way off unless I can get the debts cleared asap.

Her income currently is about 25000, so we would both need to be on any future application.
 
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