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Mortgages for the financially challenged- any advice?

(26 Posts)
ScummyMummy Tue 12-Jul-05 12:24:07

My partner and I went to see a little house yesterday. We fell in love with it. Quality of life wise it would offer us a huge boost- it has a lovely little garden, a spare room to park marauding grandparents, a bit more space. It's in a nice, more family oriented area which I know and am fond of and we have quite a few good mates living not too far away.

We're talking mortgages with our banks and it basically looks like we won't be able to do it as the mortgages we'll be offered by them will be about 30 grand short. Is there any possibility whatsoever that a mortgage broker or a self-certified mortgage thingy would offer us that much more or should we give up?

If we were able to get the mortgage we would be paying almost half our income in rent so it would be a major belt tightener. However, in one year, both my partner and I finish postgraduate courses. I am practically guaranteed a job at a salary that would make the mortgage very managable on our joint salaries. My partner will very probably be able to get a slightly higher paid job at that time as well.

So, advice please. Are there lenders out there who might consider this?

If there are should we go for it? Or is it too risky even given loveliness of house and the fairly good prospects of the scummyparents?

almostanangel Tue 12-Jul-05 12:26:32

no advice need some myself but loadsa luck and angel dust to you***************************************************************

ScummyMummy Tue 12-Jul-05 13:05:30

Thanks aaa Good luck to you too.
Any more thoughts, anyone?

tiredemma Tue 12-Jul-05 13:14:46

I know that some companies offer graduate mortgages, basing thier offers on the assumption that you will be earning a decent wage within the next few years. Bank of scotland i think was one and im sure that natwest do them.

We have a "homestart" mortgage through HSBC which is based on affordability as opposed to joint income, it suits us as its interest only at the moment and then repayment in three years when we will both be earning more money

anchovies Tue 12-Jul-05 13:17:04

Hi scummymummy

Definitely try a mortgage broker, we used charcolonline, just to see if they come up with any ideas for you.

We were in a similar situation a couple of years ago. We got a self certification mortgage, mainly cos they wouldn't take my PhD grants into account. We worked out that we could afford the mortgage up to our rates increasing to about 7% and then went for it. We were tied in for 3 years and the rate we got was terrible but last year we paid the redemption penalty and got a mortgage we a normal lender on a much better rate. It is definitely risky and I'm not sure I'd recommend it but we knew we could (just about!) afford it so went for it. Only other downside with a self certification mortgage is that you need a fairly big deposit, usually at least 15%

Good luck with whatever you decide!

ScummyMummy Tue 12-Jul-05 14:09:41

Thank you very much, tiredemma and anchovies. We've got an interview with hsbc coming up so will ask about the homestart mortgage, emma. I'll also try ringing chocolonline, anchovies. Kind of losing hope though... Perhaps it would be better to wait another year till we've finished college. I really want a garden before the boys are too old to do all the stuff on aloha's list though!

tigermoth Wed 13-Jul-05 07:50:39

scummy, IME brokers can offer lots of options that banks can't, so keep your hopes up.

We have a garden, it's true, and a small private and enclosed wood backing onto the garden. I thought our boys would live in it. The reality is that they have hardly played in it this summer - my oldest used to like making dens there for a year or two, but that's it. Both boys prefer to be taken to the park, defeating the point of a garden, rather!

If you do get your mortgage offer and start looking properly for a home with garden, do choose one with a garden that is easy to see and access from the house, so you can open doors and windows straight onto it. Our garden is raised, you have to go up narrow steps to get at the lawn. It does not feel part of the house, so it rarely gets used.

Trying to guess whereabouts this house is you've seen...

WideWebWitch Wed 13-Jul-05 08:05:32

Scummy, you will find someone who will lend you the money but they will charge you a higher rate and the repayments will therefore be higher so you may do the maths and decide it's not worth it. Or maybe it IS, or will be worth it given your future earnings and the assumed salary increases. Do a search on self cert mortgages, these are basically mortgages where you say 'yes, I can afford it' and they say 'ok then, here's some high intererst money' -sort of! The house sounds lovely. Is there anyone who can lend you £30k? Could you have a lodger for a year to contribute to the mortgage? Could you put in a low low offer? Will post again if I think of anything. I do think the market's falling so I wouldn't offer asknig price in your position. I think most places are going for 95%?IIRC of asknig price but it may be less.

batters Wed 13-Jul-05 08:16:44

scummy my dp and I were in a similar position about 5 years ago. We took the chance, got a self certified mortgate (which actually wasn't at a higher rate) and went for it. It worked for us. I would say - go for it! We used a financial adviser to find us the deal, it was with Nationwide Anglia. Charcolonline was pants for us.

I would say, find a financial adviser and get him / her to do the research for you. If you CAT me I can give you the name of the person we used, he is a friend of my dp's and I would recommend him in helping you to find a mortgage.

Your house sounds lovely, I know that feeling when you walk into a place and just know that it is the place for you and your family. Best of luck, whatever you decide!

bossykate Wed 13-Jul-05 08:29:07

hi scummy

ooh, where is your house? have to say half your net income on the mortgage payments sounds a lot to me. remember you will also need to pay various insurances. how sure are you that your family income will rise in the next year or so? if it's a cert, then no problem.

do you have the funds to pay the transation costs, e.g. legal fees?

will your childcare costs increase when you both go on to your jobs after graduation?

agree with www that in the current climate you can drive a pretty hard bargain so make a low offer.

having said that, we took a risk with a big mortgage at the height of the market last year and i'm very glad we did.

good luck with whatever you decide

noddyholder Wed 13-Jul-05 08:33:34

have you tried northern rock?

noddyholder Wed 13-Jul-05 08:35:01

following from the other postd we were in a flat until we pushed the budget like you to get a garden Ds has been in it every day since the sun has been out

Evesmama Wed 13-Jul-05 08:41:57

if you want to cat me, i am in the same position at moment..and we move inot our beautiful new house in a few weeks..i can give you names and numbers

WideWebWitch Wed 13-Jul-05 09:57:52

Hey Scummy, it's 93%, so take that into consideration. prices at 2003 levels according to this

ScummyMummy Wed 13-Jul-05 12:12:59

Oh thank you, everyone. Helpful and positive advice as usual.

Batters and Evesmama- I will definitely email you for your ideas and for the Financial Adviser's number if that's ok. I think my partner and I could really use some independent advice even if we decide that now is a bad time for us to get a big mortgage- we are truly clueless about all this! The main reason that we are thinking of buying now is that my wonderful generous Dad has just given us some money from the sale of his place that we can use towards a mortgage. On our present salaries alone we wouldn't be able to afford a garage anywhere in Londinium, let alone a house. This money has increased our options considerably but we are now realising have no clue as to what is the best thing to do and in a way seeing this gorgeous little place has confused us further! Another thing is that I tend to be over-optimistic that everything will work itself out whereas my partner is more realistic about possible pitfalls but less open to taking calculated risks that might result in positive changes. This actually balances us quite nicely on the whole but we are having some difficulty in finding the way forward on this one. It would be good to have a chat with someone who knows their stuff.

I do agree that that sort of mortgage would be a big big step, bk and that is my partner's worry also. But I do genuinely think our medium term earning potential is adequate to good and that living in nicer accomodation might be worth a temporarily largish sacrifice in disposable income. I will be a qualified social worker in a year and there really is a shortage of those so I am quietly confident about getting full time work quite quickly after qualifying. Even a job at my previous wage would cover things ok and I expect to be a bit better paid than before because of the qualification. And the house is very near a Lidl so our food bills would go right down!

I like the idea of putting in a low low offer www! They have just lowered the price tho, so I'm not sure how open to that they'd be... Still, worth a thought, eh? Thanks for the London prices info- looks promising for if we do end up waiting a year as one of our fears is that prices will have gone up again and we still won't be able to afford anything.

tigermoth- it's good to hear that gardens are not the be all and end all though if we do end up having one and the boys don't like it I shall scream! Also good to hear that mortgage brokers are helpful folks. My partner is a little suspicious!

Noddy- I will have a look at Northern Rock. Thanks for that idea.

Anyway, I must go and tidy up this flat and temporarily stop worrying about the next move! Thank you so very very much to everyone for brilliant advice. xxx

shrub Wed 13-Jul-05 12:26:04

we also fell in love with a house that was over what we could afford and my dh is the only one working as i'm looking after 3ds's! this is what we did:
1.went through 'london and country' as they are the only brokers not to charge commission (charcoal do)
2.got mortgage with abbey - which was 5 x dh's salary
3. got an interest only discount variable rate mortgage with no tie in/redemption but when i'm back at work we can change it onto a repayment. for a 100k mortgage its £380 and over £200 a month less than the repayment option - this is what all the investors do then borrow against the improvements/increase in value
4. since taking out mortage dh's salary has gone up so its now under 4 times his salary.
5. with regulations tightening up they may want proof you can find money for the repayment part seperately so you just shave off your outgoings for the application form
good luck x
remember you can further barter on price after survey - a full survey will pick up any faults

lemonice Wed 13-Jul-05 12:32:17

also all your income counts so that includes savings interest, child benefit, tax and child credits...

Evesmama Wed 13-Jul-05 15:18:15

waiting for you email and i think i can help if you do want to move now

with reg pricing..try nethouseprices.com..they'll give you what local houses have actually sold for and that may give you a bargaining tool??hth

ScummyMummy Thu 14-Jul-05 14:21:36

Arrgh! It's a no-hoper now. Have just been made redundant from crap evening job. Quite pleased as job sucked somewhat but clearly house buying is off.

ScummyMummy Thu 14-Jul-05 14:22:40

Is it common practice to give news of redundancy over the phone, btw?

bossykate Thu 14-Jul-05 14:24:15

no, it isn't... if it is a redundancy, then the organisation has to go through some quite stringent procedures.

ScummyMummy Thu 14-Jul-05 14:26:23

Confirms my view that it's a v crap organisation!

Evesmama Thu 14-Jul-05 14:40:13

very suspect as well as being heartless...sue the b***ds and 'then' buy you dream house

ScummyMummy Thu 14-Jul-05 14:41:07

Evesmama.

tigermoth Fri 15-Jul-05 07:26:49

Why not speak to a financial adviser just to test the waters? you can phone one up, tell them about your situation, how you'll get a good job when you qualify - just see what they say? They should be able to give you a rough idea over the phone, even if you decide to put your plans on hold for a bit. At the very least you'll come away knowing what type of income you have to aim for.

Sorry about your job news - does sound like a very c* organisation to me. Not warning you of impending redundancy sounds really dodgy. I bet you'll pick up a much better part time job, anyway.

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