To think the financial system works against people who are actually trying to do the right thing?

[AnnaMariaWhiskers]

OK so I know you can't have your cake and eat it, but we're trying to get a mortgage but have been refused. This is because a) we have student loans because we wanted education to invest in our future b) my dh is paying into a pension which has great returns for the future c) I only work evenings so I can raise my preschool age kids so this doesn't count towards mortgage (no family nearby, expensive childcare cancels out any financial benefit)We have no other loans, HP or even sky TV.
Just a boring rant and I know that I am very privileged compared to 99% of the world's population!

[Athenaviolet]

Red- I knew the stats about lawyers' pay when I was a young teen and did work hard and got the grades to get in. But my private school advised against it as 'there were far too many law graduates chasing after very few trainee ships' so the degree would be a gamble at best, a waste of time at worst.

[RedDaisyRed]

needs, yes luck plays a part but I also suffered in recessions and set up my own business as a result, taking good from bad as it were.

I agree with Hero about pensions. Although I know the poster said the employer pays a chunk in too the state does take away rights under pensions left right and centre and is planning a change which may mean they are taxed differently so I would not be so sure a good pension will still be a good pension in 20 years' time. (I plan to work until I die ilke others in our family so am not a great fan of pensions from that point of view either).

[Hero1callylost]

OP, I'd reconsider how much you're paying into pensions, especially if you're younger e.g. 30ish or under.

I seem both mortgage and pensions as investments for retirement - to be able to afford to live in retirement I'll have had to have paid off a mortgage as that will half my & DH's outgoings. At the moment I have a huge childcare bill and we're in those in between years - after mat leave and before any help with childcare costs kicks in. I see this as a temporary period where we contribute the minimum to pensions (my work pension rules oblige me to contribute at least 2%) so that we could afford to move to a family sized home 6 months ago. I'm missing out on good company contributions temporarily. In a year, when we get the 30 hours early years funding followed by school staring (both significantly reducing our childcare bill), we'll rejig our budget and start paying into pensions and other non-essentials again. I'm 30 with 34 years left on my mortgage - I work in retirement financial services so I absolutely know the importance of saving for retirement, but I also know at if we've paid off our mortgage there will be other options eg equity release or downsizing if our pensions aren't big enough. (They won't be big enough anyway - that's another area of financial services that's failing people but that's a whole other thread).

Is that a temporary sacrifice that could work for you?

I'd also reconsider your working position. Childcare is a household expense, not solely your expense. And by the sounds of it you're wasting that education you invested so much into!

[RedDaisyRed]

(on the point about choosing priorities in life, though, the person with good exam results - surely that proves my point - I was keen to have a nice life with a high income (life is easier, not harder with high incomes by the way) and she was not keen on the money or career side - so there we are - we take our choices and end up as we are - both happy but different which is lovely).

[RedDaisyRed]

Jace, I do know because my two daughters have bought in their 20s in the last 2 years and yes it's not easy . In fact one of them just remortgaged earlier this year (at something like 2% so a pretty good deal - remember my days of paying 12% now at her age or even 6% only a few years ago).

I don't like either that the higher % you borrow and the harder up you are for money the higher the rate you pay although I do understand that that reflects risk. I suppose it's like pay day lending or those awful banks which offered massive loans to businesses they did not want or need and then a year later valued their assets at much much less and pulled the plug so their business recovery unit could buy the assets cheaply and sell them off.

[NoArmaniNoPunani]

we got a mortgage with both of us having student loans to pay back, 2 car loans, a bit of cc debt and I put £700 pm into a pension. It is doable, use a broker.

[Ilovecrapcrafts]

OP hasn't even been back which is annoying as I would be interested to know why she thinks having a pension or student loan is in anyway unusual

[JaceLancs]

I don't think everyone is aware how much the mortgage lending criteria has changed in recent times
Rates are not always as advertised and the way lenders apply the affordability criteria
I have an ok paid job, and a reasonable amount of equity in the house I have lived in for many years however due to past relationship breakdowns (buying exh and exdp out) I have a fairly large mortgage
Recently my fixed term deal came to an end so I was shopping around for a new mortgage deal, the amounts I was offered varied by £70,000 supplying exactly the same figures
My own bank would not allow me an extra £10,000 on the mortgage but were happy to offer me an unsecured loan of up to £25,000 with higher payments, obviously higher interest therefore greater profits - I still don't understand how that got past both affordability scoring and ethical lending
As a previous poster stated Santander made me the highest offer but I did not accept their deal for other reasons
Halifax gave the best customer service even though I didn't meet their criteria I would recommend them and try them again in the future

[avocadotoast]

Not quite. But I did do well at school, I did get good results, I went and got a degree I've just never been overly career minded and I think there are more important things in life than earning a shit ton of money. (And I still managed to buy a house last year .)

Fact of the matter is that some people will work equally as hard as you did at school and will come out with shit results because they're not academically bright. Not everyone can just follow the path to riches like you did (in fact, I'd wager that the number who can is really quite small).

Also, on a different note, is it not pretty fucked up that society expects teenagers (children!) to start making decisions that will shape their entire lives? And that there seems to be this "if you don't sort it out in late teens/early twenties then that's it" mentality? I know I'm a totally different person now to who I was at 14 or 15.

[RedDaisyRed]

It isn't that simple but I am sure you accept that some teenagers sit there and look at what jobs pay and others don't think about it and don'tplan it. Some don't work hard at school and don't get good exam results and some do. Some when adult give up work when children come along and some don't. We are to an extent the master of our own fate and have some control over what ultimately we earn . (And yes I did plan my career - I cylced to the library in Newcastle as a teenage for example to borrow a book called "What people earn" and decided to work very hard, get the best exam results in the school and become a lawyer even though the head mistress said it was a silly choice because at that time there were too many lawyers. So yes I do believe what we plan does have some impact on our life. You will probably now tell me you did exactly the same things and it didn't work and I will go off having been proven wrong I suppose.....)

[avocadotoast]

particyularly ilf you p icked a high paid career as I did

Yeah ok Red because it's that simple and easy...

[Beemer30]

I have it on good authority that Santander is the most lenient high street lender. Go to them direct and see if they offer you what you need.

[ConceptOfBiscuits]

softhedgehog

Really I'm naive, jog along
My post meant not to pay yourself directly, you know if you read it in the context of the handful of posts above...
As per all the financial advise I have seen.

Forgot on MN you have to add text to explain everything, cover each and ever possible scenario and outcome and talk about the in's and outs of a nats arse otherwise someone will come along and point out something ridiculous, trying to be a smart arse.

[EmeraldKitten]

Fucking hell red.

You sound very bitter about something tbh - it's usually only bitterness that prompts a post so full of spite.

[Ally1234]

OP I don't understand why your income isn't taken into account. I also work evenings so we don't have to pay childcare for pre school children but income is income. As long as you have a contract and definite hours and income then it should be included.

[RedDaisyRed]

I bought before I bred 30 years ago. My parents did too. My grandfather waited until he was over 40 to marry because he couldn't afford not to. I think you have had children before buying so in a sense that was your mistake. Also where both man and woman work full time and don't have children they are always going to get a loan more easily and even if the child is here when you apply if you both have a full time salary even after child care costs particyularly ilf you p icked a high paid career as I did and presumably your husband did (as you say your wages but not his would be the same as childcare - childcare costs are costs of men and women not just women of course in equal marriages). May be it's because you have an unequal marriage where women serve and men earn that you are in this mess?

[LionessAtHeart]

They don't take temporary contracts into account
Actually some will.
I got my first with a fixed term contract with 1year left - that was in 2010 - that was four times our joint income, with 10% deposit.
Then I got one with only 1month left on my contract in 2012 (Halifax were only bank willing to touch us) - they were willing to give us 4x joint income, we only needed 3xjoint. That time we did have a 25% deposit (we made a lot on our first house despite buying in the slump - picked it well).

You have to talk to them. It helped that I'd had various temp contracts with same employer since 2008. We had also done a full budget spreadsheet to demonstrate that we could pay even with loss of my income (which for the house we bought in 2012 we knew would actually be necessary as DS was due and I was giving up work - not that we pointed that out).

[tvlover1234]

Also our mortgage is for 35 years as we are 20 years old.

[tvlover1234]

Ego. As stated before where are first time buyers and have a 95% LTV mortgage. Our mortgage repayments will be considerably lower than renting a 3 bed house in our area. We also have no commitments other than running our cars.

[DoJo]

Mortgage rates are expected to rise around 2% in the next couple of years - affordability is crucial at the moment and many deals have limited availability because of this.

[tvlover1234]

I agree with binit. We have a total income of 31,500 and we're borrowing 140,600! Mortgage brokers are definitely way to go

[Binit]

You definitely need to see an independent mortgage broker. They have more knowledge of the current decisions lenders and making and where they have got mortgages for people in a similar situation to you. Some are much tighter than others. They also have contacts in these places - they can ask their contacts whether your application is likely to be accepted or not and then you can apply accordingly.

I'd never dare to apply for a mortgage without the help of a person like this. I used this guy, so did 2 of my siblings. We all got mortgages accepted. Even though I was on mat leave at the time, even though my db and SIL needed to borrow a very substantial amount compared to their incomes.

[avocadotoast]

They don't just take into account what the mortgage will cost now, though; they also look at what the payments would be if interest rates were to rise. Could you still afford the payments on the mortgage you're trying to get if rates did jump up?

We took out a 95% mortgage last year. It is risky. If rates rise we'd struggle a little but we'd manage.

How much does your OH pay into his pension as a percentage of his income? Is it something you could reduce?