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

[Bluee1994]

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 !!

I would recommend a signing up to check my file. It has all the credit agencies the companies use, my Experian score was excellent but check my file was only the lower end of good. On £34k with a £268 car finance I got a mortgage of £150k, so I would really check into things and use a broker. Shared ownership mortgage offers are lower usually, as they do take into account the rent payments. Would shared ownership be cheaper than your current rent?

You need a mortgage broker and preferably three years worth of dh's business accounts.

Has your H declared £30k of profit though - ie had to pay tax on £30k or has he taken off a ton of expenses and declared profit of say £14k? It's very common to do that but it's an absolute bugger if you need to borrow.

Hi everyone

I reached out to a Mortgage Broker who took our information including finance/credit card debt, and called us back to say we can get around £275,000. This time we told him the preschool fees we pay after we get the 85% back. (Not sure if this is where we went wrong before as we told previous advisor fees were £715 a month)

He has asked us to send him 3 months statements/payslips/husbands accounts etc so will give us an accurate figure once he's calculated it

That has given us hope again as I was shocked considering we aren't in debt other than 1k between us on credit cards and the car finance (which broker said is ok and he will just minus it)

Just waiting on hearing back now! Thanks all!

Your score doesn’t matter; that’s made up by Experian, who don’t lend money. All the credit institutions do their own scoring, and they can be wildly different. It’s what’s on your credit file that matters, rather than the score.

I’m guessing that if neither of you have defaults or late payments etc; it’ll come down to credit utilisation and expenses. There’s an amount removed for dependents; and new car finance is likely to be high, plus a (relatively low) credit card debt.

Is the £30k a year from your partners business what he paid tax on? Some banks take the HMRC figure.

If it's shared ownership then you have to pay rent on the other half, so that will be taken into account too

I’m surprised it’s as low as that. Brokers are the way to go I’d say. When we got our first mortgage four years ago, bank quotes online were offering pitiful amounts based on our income. Our broker worked wonders and we got a 3 bed semi which we’ve now upgraded to a 4 bed detached. It can definitely be done.

Its absolutely because of the cost of the pre-school fees (and the car, but that figure is much smaller in comparison). Definitely only tell them the actual amount you pay. If the children are in pre-school, can you wait until they are in school (assuming with no fees) to apply?

@ImplementingTheDennisSystem the government announced the end of ‘no-fault evictions’ in the queens speech. Now is not the time to become a landlord if you aren’t experienced and may need the property back. I’d also expect a lot of small landlords selling up soon if they can’t rely on s. 21

I reckon it’s your pre school fees that’s bringing it down.

any monthly commitments-loans, credit cards, childcare fees etc.