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Original poster

Can't afford a flat/house - only lending us 60k

35 replies

Bluee1994 · 09/05/2022 14:26

Hi

I just wanted to get this off my mind i guess as i feel abit down

Me and my husband wanted to get onto the property ladder and we thought about Shared Ownership

We rent at the moment but we managed to save 25k and really thought we may be in an ok position to buy a 40% share which is around £120,000, and the deposit they want for this is around 6-7k. We reached out to 2 Mortgage advisors who came back and told us the most we can borrow is £60,000

I earn 26k and husband is self employed so it varies and they took his earnings from 2020/21 and this year's which was 30k a year.

It was probably naive of us to think we will definitely be alright to borrow that amount of £120,000 as we have the deposit and we earn £56,000 a year combined..so assumed they would multiply that by 3 or 4. Definitely didn't expect to be told 60k is the most we can borrow. That wouldn't buy us anything at all anywhere

They took into account the pre-school fees which we said we get 85% back, and credit cards which we owe a total of 1k on. We do have 1 car on finance which we recently got.

I'm just deflated as i'm not sure if we can ever get onto the ladder if we can't even get a shared ownership. Just wanted to get it off my mind

My husband said we will try again next year but i dont think that will make a huge difference to what we can borrow. We will of course keep saving but i guess its an eye opener, and its not always a case of multiplying your salary by 4 !!

OP posts:
deadlyseaurchin · 09/05/2022 14:28

did you use a broker? how much car on finance? i would pay that off

1990s · 09/05/2022 14:29

Have you tried a broker? They should be able to help with the specifics of your application, eg finding lenders who will lend more than that as there likely will be some.

Chaoslatte · 09/05/2022 14:30

Have you checked your credit scores - do you have bad credit? Definitely speak to a broker.

Interested in this thread?

Then you might like threads about this subject:

General money
User354354 · 09/05/2022 14:30

How many years accounts husband got ?

A new car finance is not helping, how much is that per month, and for how long ?

May be worth asking a few brokers to look through your finances and see what they can recommend.

ReadyToMoveIt · 09/05/2022 14:31

They multiply by 4 (ish) but then take away ‘expenses’ such as loans, credit cards and other regular financial commitments such as nursery fees to work out affordability. If you put your numbers into an online mortgage calculator you get a pretty good idea of what you can borrow… most banks/building societies etc have one.

Original poster
Bluee1994 · 09/05/2022 14:34

Thank you all for your replies. We will reach out to brokers definitely. The car finance is £240 a month and was taken out in January

OP posts:
BernadetteRostankowskiWolowitz · 09/05/2022 14:35

There is definetly something afoot. We borrowed 100k (could have got 145k) with me and dh on 22k each and a lower deposit than you.

We used First Mortgage as our broker.

BernadetteRostankowskiWolowitz · 09/05/2022 14:36

I'm surprised you get 85% of your preschool fees back on those salaries!

BarbaraofSeville · 09/05/2022 14:37

It might look better if you pay off the car finance and credit card (but spend a small amount on it each month and pay off in full, eg a tank of petrol) and have a lower deposit.

Say that took you down to a £15k deposit but no debt, would that work better. Also, if they're counting your childcare costs, they need to count the money you get towards it, it doesn't make sense otherwise.

It's rare you need a broker these days, but you should definitely benefit due to the combined complications of SE income and shared ownership.

Good luck.

LetsGoCrazyPurpleBanana · 09/05/2022 14:39

Definitely try London and country. We used them after hearing nothing but good things from Mumsnet recommendations.

TulipsGarden · 09/05/2022 14:41

There must be something else going on - try to clear as much of your debt and regular outgoings as possible and then try with a broker. Have you checked your credit records?

TheYearOfSmallThings · 09/05/2022 14:43

Definitely go via a broker. Unless there is something going on that you haven't mentioned you should be ok for the amount you are looking for.

BarbaraofSeville · 09/05/2022 14:45

How much is the car finance in total? Sometimes it's the whole cost of the car that's on your file, including the balloon payment, so it might look really big, even if you won't ever pay it because you'll just take out another agreement and carry on paying £240 pm.

rainbowandglitter · 09/05/2022 14:46

That doesn't sound right to me.

ChiswickFlo · 09/05/2022 14:47

Try London and country
Pay the £1k off the cc

Original poster
Bluee1994 · 09/05/2022 14:48

The car finance is a 4 year agreement. Will try to pay as much of that as we can. Our credit scores on Experian are 'Excellent'. The pre-school fees for both kids are around £715 a month. I will try the Brokers you have suggested here. We will clear the credit card ASAP aswell. Maybe it was the wrong time to try

I really appreciate all your replies and advice

OP posts:
evilharpy · 09/05/2022 14:54

When you say you reached out to two mortgage advisers, where did you find them - are they connected with an estate agent or someone you found online? Did they ask you to complete a list of expenditure to evidence affordability?

This really doesn't sound right at all.

Anotherusernamethisweek · 09/05/2022 15:04

My partner and I have just been offered 221k and we earn less than you and both self employed.

ImplementingTheDennisSystem · 09/05/2022 15:13

If you can't get a better mortgage deal, what about buying a cheap house or flay somewhere (it doesn't have to be close by) and renting it out? It will get you paying down a mortgage and give you some equity.

FAQs · 09/05/2022 15:16

@ImplementingTheDennisSystem they’ll need a higher deposit for a BTL.

@Bluee1994 that doesn’t sound correct, it try as suggested L&C or places such as Kensington mortgage who are more realistic with those self employed.

Alwayshoovering · 09/05/2022 15:20

To be lent so little on pretty good income would suggest you have more debt than you have let on. Have you got bad credit, through missed payments, loans, credit cards, store cards you haven't declared.
Have you ever used a payday loan company, klarna etc?
That would all have a massive impact on your affordability and what they would allow you to borrow.

OnlyFoolsnMothers · 09/05/2022 15:23

How much is the car debt in total? I thought the whole amount comes off the amount you can borrow

bdd2017 · 09/05/2022 15:30

Is it because you're going for shared ownership, don't you have to pay a kind of rent on the rest of the house? So they're probably taking into account that fee as well as the mortgage and other expenses you need to pay back.

gothereagain · 09/05/2022 15:32

Its the affordability check. How much will a 60k mortgage cost you vs your rent?

If the mortgage is less than your rent then their calculations on your affordability are unfair.

Next time you do an application, give the childcare cost minus the 85% you get back - i.e. the actual amount you pay.

justanotherlaura · 09/05/2022 15:36

My friend tried to get a mortgage and they took the whole cost of the car , 15000, off her offer even though she was 150 a month and would never buy the car at the end. She was offered 100k mortgage without the car but 85k with it, that's maybe hampering you?

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