Is there a way for me to combine my personal debt with a mortgage to get onto the property ladder?

Posted on 4 January 2008

I have a significant amount of personal debt, but a good income and have never bought before. Is there a way for me to combine my personal debt with a mortgage to get onto the property ladder? Is it an option you would recommend?

Hi Tamsin,

You can keep your personal debt and still get onto the property ladder, as long as you can afford the monthly payments.

Some lenders offer mortgages for more than the value of the property, so you could use some to pay off the loans with the worst interest rates, but you need to be aware that, unless the value of the property increases quickly, or you make large payments to pay off the capital debt in the first few months, you will be in a "negative equity" situation: should you have trouble with your payments, or need to sell, the property could be worth less than the mortgage.

The current property market is unlikely to increase in value, so unless you have a good deposit, plus money to pay the debts off, I'm sorry to say that it sounds like this might not be the right time for you to buy.

If your income is good, I would spend a year knuckling down and paying off lots of debt and saving for a deposit so that you have a safety net. You might find that property prices have come down sufficiently that you get a good bargain.

Best of luck.

Categories: 100%+ borrowing, Current rates & the market, First-time buyer

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