Cost of living, what are we meant to do???

[Rubylu]

So I have a 6 month old baby, I work full time earn a decent wage for my age of 33k a year at 22.

My partner and I were looking to buy a house this time last year and my mortgage advisor told me I could lend up to 145k on my own, my partner can’t be put on the mortgage due to not long being self employed he also has some debts etc.

Fast forward to now a house has come up in our area for 165k we live near Birmingham so it’s rare for a decent house to be this price as most 3 bed semis round here are atleast 220k however the seller wants a quick sale due to family dying and multiple surveys have been done with no issues.

Because I’ve now had a baby apparently I can only lend 125k? I have a 30k deposit ready. The seller won’t take any less than 165k and apparently my mortgage advisor simply can’t get me any more.
What I struggle to understand is how!!! I take home £2250 a month. The mortgage payments would be roughly £650 a month, that would leave me with £1600 our other bills are about £600 so I would be left with a disposable income of £1000 a month. Now I get we’ve had a baby but he doesn’t cost me a grand a month!!!!! We also get child benefit for him and that covers alot of his needs I spend no more than £100 a month of my own money on him…

I have no car payments no debt etc.
The council won’t consider us because we’d be in too low of a band because of my earnings, we can’t buy even though I have a decent deposit and a decent wage…
If we wanted to rent a small house in this area that would be somewhat average it would cost about £1200 a month. We were renting a tiny flat for £800 a month and have moved back in with my parents in order to buy a house, even though I now apparently can’t.
What do they actually expect people to do😳😳😳

Any advice welcome and would also like to know if anyone else is in a similar situation

Don’t put your child as your dependent? That’s what I did!

How much money is your partner bringing to the set up?

Be extremely careful and protect your money.

I agree @Rubylu , the rules can be very rigid and often don't make sense, especially now when interest rates look likely to have peaked. Could you try another mortgage broker? Alternatively could you or your partner borrow the extra £10K and increase the size of your deposit? The seller seems to have reduced the price significantly already, so there probably isn't any room for negotiation there, but you can always ask again.

@Dacadactyl My partner won’t be on the mortgage at all, he contributes to the bills but essentially he will just be renting to live there in the bigger picture even though we’re obviously a family, I would never put him on the house as it’s all my money.

@ClematisBlue49 I did consider this! It’s just finding someone to lend us 10k as I feel like everyone is feeling the pinch atm🥲 it just doesn’t make sense we could easily pay £800 a month rent but not £650 for a mortgage!! Crazy.

@DuckBee I did also consider this but worried they’ll notice his child benefit into our joint account😂

But babies do cost. If you and partner are both working full time, then most people have childcare costs. The bank won’t care if you don’t, but if you have a child or other dependent they will automatically deduct x amount a year assuming per extra mouth you need to feed, clothe, childcare, large essentials, all other child related costs.

You won’t be getting a mortgage based on a 6 month old forever either, so they if you have a 20 year mortgage, it will be 18 years of children.

Unfortunately it’s because your child is dependent on you financially, and they won’t be 6 months old forever.

If you can afford the £650 mortgage and £800 rent, why don’t you get a mortgage with a shorter term? They will probably lend that £10k more if you take a shorter term, ie paying £800 a month

They arnt just considering what you can afford right now though - you could have childcare bills of £1k a month in a years time. Dependents do have to be considered in an affordability assessment because they inevitably do reduce your available income.

Have you tried any other lenders?

Get OH to take out a 10k loan? 🤔

Anyway they may have offers quite a bit over 165k if it's a super low price for the area 😏

@Caspianberg i understand that, we won’t have childcare costs, but he also won’t cost me 1000 a month even when he’s older, with the way people are struggling at the minute not many people have a disposable income of a grand a month so I don’t see which way they expect people to turn

It sounds really harsh OP but in terms of 'what do they expect people to do' a lot of people expect that they need to be set up with a family home before they have a baby. You chose to have a baby very young and this is one of the main reasons why people wait. It's not fair and I understand why it's massively disappointing and frustrating. The cost of renting now is just ridiculous. Have you tried a different broker? Some mortgages only need self-employed accounts for 2 years.

To be blunt, does your partner need to be self-employed? You’re looking to buy on one income when it could be two if he was employed…

Presumably your baby will be costing you a lot when you go back to work though or are family caring for him?

You've no factored in nursery fee's they have. Babes you need to look at that

@remembe I don’t think anybody expected to struggle the way a lot of people are these days, you can plan ahead for a lot of things but it doesn’t always go to plan, I got pregnant on the pill otherwise I would have chose to buy first.

I'm not dead set on buying but I can’t get a council house either so my only other option is to be ripped off privately renting, I just think it’s a little bit backwards.

We’ve contacted a different mortgage advisor who will get back to me tomorrow so hopefully they can sort something

@fairymary87 He wont be going to nursery, family are looking after him 😊

Remember the banks also stress test you, so it maybe that you can afford it now, but the bank will check if you can afford say 8% for example. Maybe thats where you're falling down?

It doesn’t matter what you do or don’t spend though.

The ‘average’ according to whoever runs the banking systems says a dependent costs an extra £850 a month for example. Ie £10k a year. That’s a guess btw.
Its based on average, across the lifetime of your mortgage.

@Rubylu:who is looking after the baby when you work? Childcare and other costs would add up to £1k a month.

The affordability rigidity is there for a reason unfortunately.

House isn't just "mortgage" payment as with rent. ALL repairs and upkeep are on you. Boioer is x grand, roof is xx grand.
When people say "i can afford higher rent so why not mortgage" are missing the part where if your roof caves in, it won't be landlord paying. That's factored in for affordability too.

My DS and DDIL bought the house before trying for the baby for this very reason. Weren't you told/aware that the baby would affect your affordability?

In all honesty there are probably a vanishingly small amount of 22 year olds who can buy a three bed alone with a baby, so in general terms people buy the house first or buy with two wages. The obvious answer really is for your partners earnings to form part of the calculation. If you wait until he can do this, you could possibly stretch to something more expensive if you wanted?

I also didn't tell them I had a dependant. My DC lived more than 50% with their Dad at the time and so it was true in so far as I don't pay CMS.

The other option is to agree that your DP pays Child Maintenance each month to the tune of whatever the shortfall is that you need, make sure that he pays it into your account for 3 months then apply, as some lenders will class that as income too. but make sure that no CB goes into your own account as that shows you as having a dependant.

And this.. plus they won't factor in personal circumstances regarding if you're paying for child care or not.

Luckily I haven't had a roof cave in yet though 😬

OP, you may say that family will care for your baby, but the mortgage company has to assume that the arrangement could fall through, leaving you with nursery fees starting in 6 months time and going on until your child is 4 years 10 months (reception class). That's an extra £1,000 a month for four years.

They are mitigating their risk by offering you a smaller mortgage.

I hope you find someone who will lend you the larger amount.