Mortgage & school fees

[nearlyhometime]

Hi,

Hoping someone can help with this. I'm in the process of looking for a new house after my divorce.

I earn £60k a year and I'm looking for a property priced around 230 - 250k. My credit rating is outstanding so I thought getting a mortgage of around 200 - 220k would be no problem. Unfortunately the message I'm getting from pretty much all lenders is that because I pay school fees of 850 a month they won't consider giving me any money.

I was wondering if anyone knows of any lenders that calculate mortgages purely on income multiples rather than affordability. The only one I can find is Natwest but their rates are too high.

Thanks

[uggmum]

Most responsible lenders will base your mortgage application on your affordability. Therefore, they will calculate the annual cost of your school fees and deduct them from your salary.

You could try using a mortgage broker to see if they can come up with any different lenders for you.

[nearlyhometime]

Thanks uggmum. I've tried a mortgage broker and he's the one who told me that there was only one lender who would lend to me but he hasn't called me back to actually tell me which one it is (I'm assuming it's Natwest from having spent most of the day googling!)

The thing is, I've already calculated how much I can afford by knocking off the school fees and I can manage both the fees and the mortgage. I don't know how they work it out but it doesn't seem to be as simple as reducing the salary by the school fees. When I spoke to Yorkshire Building Society they quoted 225k as how much they would lend me but as soon as i mentioned school fees of 10k a year they dropped the amount to 85k!!! And then wouldn't ( or couldn't) tell me why it dropped so much!

[wendybird77]

Find a good mortgage broker. We used London & Country Mortgages and the broker managed to get us more than 5x single income (my income doesn't count for mortgage purposes as SE). Obviously depends on circumstances - we have a very good LTV and outstanding credit history, so not very risky despite being at the very top of our affordability (on one income). We are getting our mortgage from Abbey at a very good rate and this is down to the mortgage broker - they would not have lent us as much according to their online calculator. Alternatively you could wait and rent a year or so and see what happens to the market - sold prices are down round my way, despite ever increasing asking prices.

[crazyhead]

I'd tell lenders that you are going to send your kids to state school next year. That's what you'll have to do anyway if you can't afford the payments, it isn't like declaring a debt you are tied into is it? Or even like a nursery cost where there is no state alternative. You just need to be pragmatic about it.

[financialwizard]

Yes, great idea to commit mortgage fraud.

Don't do that OP. Talk to London & County. The trouble is that different lenders use different calculations for affordability.

[picturesinthefirelight]

It never occurred to me to mention school fees when we were sorting out our mortgage.

Then again I can't believe you can borrow that much on an income of £60k. I would have thought £180k was a more reasonable amount.

[lalalonglegs]

#850 per month is about a quarter of your take home pay, I think, a #225k repayment mortgage would be about another third so I can understand why lenders are concerned... Are you getting any maintenance or support from your ex? Could these payments be included in your income?

[nearlyhometime]

Thanks all for your input.

I will admit the mortgage fraud thing did cross my mind!! But the thought was only fleeting and it's gone now.

Having spent most of the day mulling it over and revisiting the numbers i think (unfortunately) that the mortgage companies may be right. a mortgage of 225k on my income, with the school fees is probably too high and I've only gone as high as that recently because I found a house at 250k.

So I'm going to lower my expectations, look for cheaper properties and try and save some more to put down a bigger deposit.

London & County are the brokers who told me no in the first place so although I'll speak to them again tomorrow I don't think they're going to be able to offer me any magic beans

[RedHelenB]

If you can afford it then I would be economical with the truth. When I got my mortgage with the Halifax the advisor herself stretched the truth ( that I was prepared to work full time, no mention of pregnancy) & I've made all the payments plus there is enough equity to more than pay off remaining mortgage. When push comes to shove then you'd pay for a roof over your head above school fees so the banks aren't in any danger of you defaulting.