Mortgages

[Icanflyhigh]

Bear with me on this, might be long and I'm ranty.

DH and I applied for mortgage, jumped through all the usual hoops to be told there is a deal available IF we can increase our deposit to 20%

We currently have just over 5.5% deposit for the property we want to buy. We can't raise another 15% in a month of Sundays.

On paper, it all works. Joint income of almost 70k, but my income comes from 5 different employers and most lenders will only take 2 salaries from one person into account. I also had an IVA which finished successfully in 2021, but again, most lenders want 3 years clear of IVA before committing.

I signed up with credit ladder over 4 years ago and it has recorded every rent payment, on time, in full.

There are no missed payments anywhere and we are in credit on all of our utilities. We don't have credit card debt or loans and have worked hard to save a decent deposit, which we are adding to.

My biggest issue is that the mortgage we would be paying is LESS than our current rent, and we've offered to pay a higher mortgage repayment.

Why is it so damned difficult to buy a house?

Feel so jaded tonight. Had our hearts set on a house we both love and the dream is over.

Yep, from experience you need to demonstrate a longer period of time out of the IVA. It’s disappointing I get it but it’s not personal for them.

Either you have a better history of credit management, or you have to put down a bigger deposit to share the perceived risk.

I feels worse when you are the reason for not being able to move. Try and get a positive savings plan in place. Start putting away the difference you would have paid on any new mortgage and you’ll soon find yourself in a stronger position.

Indeed, also with interest rates going the way they are a 5% deposit is a bit risky.

As others have said, I wouldn't even consider buying with 5%, especially with interest rates the way they are.

If you can't afford to save more, then you can't afford to be a homeowner. It's not just the mortgage, paying for all the insurance, maintenance etc is expensive. You need to have a decent chunk of surplus money in your budget each month.

God, ain't that the truth. I have had to find over £1000 this month to replace the washing machine and fix the plumbing issue that contributed the the demise of the previous washing machine. 😣

Now is not the time to be taking out a new mortgage you would be better waiting until the economy has stabilised, the lenders are not willing to take on any risks just now, whereas a year or so ago you wouldn't have any issues. Wait a year and keep saving or an option might be to look at new builds where they are offering boosts to your deposit.

You're just embarrassing yourself. There are categorically not tens of thousands of people who have converted five jobs into a limited company that invoices their former employer - that is absolute total bunkum.

I wouldn’t consider the self-employed Ltd company route as that’s bonkers and providers would normally want about 3 years worth of accounts, so you’d have an even longer wait. To suggest that when we don’t know what you do is also very misleading. Having multiple jobs doesn’t mean you can be self employed. You could work on the checkouts one day a week across, Tesco, Sainsbury, Asda, Waitrose and Lidl. I’d love to see the look on their faces if you followed a PP advice and told them you’d set up a limited company and would like to be self employed as you have multiple jobs!
Exactly - no way that would fly - it is extremely bad advice.

Well, we'll just have to disagree.

Better tell my entire IT department that an angry keyboard warrior doesn't think their situation can possibly exist.

They will be contractors though. The OP doesn't say she is a contractor, she says she has five jobs.

And yet the gardener who waters the plants in the car park at Tesco, Sainsbury, Asda, Waitrose and Lidl almost certainly does have a Ltd company. As does the HVAC engineer who repairs all their fridges. As does the manual handling instructor who provides all their staff training. As does their industrial access person who operates the cherry pickers to get up into their roof voids. As does the electrician who comes and does all their PAT testing. As do, quite literally, tens of thousands of people up and down the country.

The decision whether to have an in-house versus outsourced capability is one that is discussed by management teams in boardrooms every single day. There is no reason why any services provided in house by employees couldn't be redefined as being provided under a managed services contract. Just requires flexibility of mind and a creative problem-solving approach.

How do I know this is correct? Because I have done exactly this, only last week, for an employee who was previously an in-house maintenance worker doing 0.4FTE for us, with the balance of his time shared with two other employers. As of this week, he is off payroll and invoicing us for his time instead.

So keep up with the "don't know what you're talking about" posts ... it's you who is embarrassing yourself.

They are contractors now ... but they were employees before that. The OP didn't say she is a contractor now ... but if she makes some changes, maybe she could be.

You are being ridiculous - an entire IT department of contractors doesn't make your advice to the OP correct.
I have 30+ years in IT including 2 periods of being a Limited Company contractor so I know exactly how this works, thanks.

We don't knwo what the OP does - but as a PP said, it's entirely possible (and legit) that they work for 5 different supermarkets on the till. That is increasingly common with zero hours contracts and it doesn't mean that all five can't be legitimate PAYE employment. The idea that the OP could simply waltz into each job and say " don't send me a payslip, I'll invoice you from now on" (your suggestion) is from the realms of fantasy.
But feel free to keep on claiming you know better and embarrassing yourself if you prefer.

The only smart thing you've said is that "we don't know what the OP does".

And yet, you think yourself entitled to hurl abuse at other posters.

And you assume the OP works on the checkout at the supermarket. Nothing wrong with that if they do ... but it is extremely revealing of your latent prejudices.

If it's any consolation we really struggled to raise a BTL mortgage with a squeaky clean track record and a 60% deposit, that was down to our age but reality is that wouldn't have been an issue 12 months ago.
I hang on until your record is clear, deposit a bit bigger and prices maybe dropped.

It might be a blessing in disguise.

So frustrating for you though.

Your advice was faulty and highly inappropriate - I haven't "hurled any abuse" at you. I am sorry you are so determined to defend your terrible advice - but that's a matter for you.

Maybe buy in a cheaper area so your deposit becomes a higher percentage?

Go back and read the actual post. It won't take you long to find .. it's the second one on the thread. I didn't give advice. I asked a question. Here it is again ... verbatim:

"Could you set up a company and invoice your employers, instead of being paid through payroll?"

It is not advice. It is a respectful question. It may helpful, or it may not. We don't actually know. But it is neither inappropriate, nor can it be wrong - because it is not a statement, but a question. That is simply a matter of logic. As an IT person, I'm rather disappointed you don't understand that.

But maybe the meme of the angry keyboard warrior lacking in social skills has a basis in truth after all?

But the issue is just "becoming a contractors" isn't an easy solution to a temporary mortgage application issue. It comes with tax and benefits implications.

I've not idea on the legalities so I'll let you two debate that, but in this situation it won't help OP anyway. I have a limited company and I have to provide between 3-5 years of accounts (depending on lender).

OP - have you been with your bank long? Could you look and see if you are pre-approved for any sort of loan? Obviously this will impact affordability so that's for you to decide if it's worth it. Not ideal to add more debt to anyone's life right now, but is this is offset by rental savings might be an option.

But really sucks that you're so close. Good luck.

This is who I used, they'll lend 85% LTV with an IVA

https://www.simplyadverse.co.uk

You can't use a loan for a deposit. Even if you could, the loan would mean they can't borrow as much.

Thanks all, it IS the IVA causing the issue and if we were able to put a 20% deposit down we'd be good to go. November 2024 it will be three years clear, so we just have to wait it out.

My income streams are not possible to put under the umbrella of a Ltd company, largely as the job I do would be unlawful on self-employed terms - meaning I have to be employed by the entity I work for. There is an overarching governemnt body that are willing to write a formal letter to explain my income, and why it comes from 5 different places currently. This may change in the future and it may not. I don't know.

I was feeling pretty hopeless last night, we live a house that isn't home, in that it doesn't feel like home, we both work so damned hard to pay an extortionate rent to a batshit crazy landlady who can't be arsed to fix the fireplace - and has refused to do it for 15 years (previous tenants not just us).

We're not allowed to decorated, it looks like Laura Ashley vomited chintz in every room and it's just horrible.

The garden is no bigger than a postage stamp, it's boggy and miserable for the DC - this was a chance for us to own a property that ticks all of our boxes, has room for the DC, a good garden etc.

I feel like I'm letting DH and DC down, and I know I'm really not - but it's an overhang from a previous life where exH left me with so much debt and no way out but an IVA or bankruptcy. I now wish I'd done the bankruptcy as that would be off my record now.

Just feeling jaded and sorry for myself.

Ah it'll get better, save like crazy and bide your time and I'm sure you'll get there. Currently saving for a mortgage after some bad financial decisions when I was younger destroyed my credit and it is soul destroying. Good news is it won't be forever and you will get your home even if its a couple of years. I keep telling myself what's 2 years to get my dream?

I feel your pain @Icanflyhigh I had to battle to clear debt after leaving my abusive ex. It's a long slog but you are nearly there.