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

While I do think it’s harder for first time buyers now, most people I knew started off in flats or 2-bed starter homes. No one expected their forever home to be their first property purchase.

But if you're going to continue earning that salary, you'll presumably have childcare costs? Or is someone going to be caring for your child full time for free?

If the latter is the case, you can't blame building societies and banks having regulations which are based on the reality for most people. Most people returning to work with a baby will be paying a lot of money for proper regulated childcare. A nursery place for a baby can easily cost 1k - 1.5k a month. Quite rightly, mortgage providers factor this in. For many people, childcare is their biggest expense, bigger than mortgage payments.

Can your partner pause his self employment for a few months, get an employed job and pay his debts off?

Use those circumstances to buy a house together (I agree that if this house really is 'cheap' for what it is it could go for more than £165k so you might not be able to afford it anyway), then he can try again with self employment if it's likely to be more lucrative than being employed - does he earn a decent amount from self employment? Remember that full time NMW is now around £22k pa, so he'd need to be bringing home £25k+ to account for lack of pension contributions, paid leave etc.

The other consideration will be what happens to your income, expenses and childcare costs if you have another child - their algorithm will tell them that a good percentage of people in their 20s with one child will go on to have at least one more.

Honestly I wouldn't buy a house that's well below market rate! We got a 'deal' with our flat as the seller needed "quick sale"... only to find out once we moved in there was a nightmare neighbour the seller was desperate to get away from. He's made our life hell for the past 2 years with death threats, constant banging etc. Watch out.

I'm well aware you can't change this but your situation is quite unusual and lenders need to work on the 'most likely'. 22 is very young to have a child and most people buy property before having kids so their mortgage is based on no kids. Then the kids come along and they just have to adapt to the mortgage. Your childcare situation is unusual too as most people pay childcare and lenders need to take this into account.

This is really unhelpful. There are many reasons why flats are a poor investment - cladding, leasehold, service charges etc. Plus in some areas (esp rural) they just don't exist.

I really wish we could break the cycle of people financially stretching themselves for bigger mortgages- this keeps the prices up and so it continues.

Me and DH bought a house which needs only one of us to be working to pay the mortgage and I would wholeheartedly recommend this to people. If you are able to have a look around OP and buy within the means of just your income your life will be so much more comfortable- particularly as you are young and have a good wage so lots of opportunity to get your pension nicely padded out.

@Rubylu it would also be wise for you to factor in that even if family are currently looking after your baby full time for no remuneration (!) things can change. For example, what if the family members get ill/can't manage full time childcare/ can't afford to work full time unpaid and need a paid job? It's a risky situation to assume you can have a child, continue to work full time and get to keep all of your earnings! Most people would probably be paying out more than their mortgage on regulated childcare.

Surely you can see that your own situation is highly unusual; most women wait until they're older and more established in their career before having kids and also wouldn't assume someone else will look after them full time for free!

This might sound a bit harsh but you seem very naive to not realise that mortgage lenders base their terms and conditions on real life, not on an individual's unusual circumstances

A Quick Look on Rightmove and there are three bedroom houses in Birmingham for less than that. Why not look slightly further out than you are. Or go for a smaller property

It’s been many years since I was in a similar position. DH had less than 2 years worth of accounts for his business so lenders were reluctant to touch us. I was full time, pregnant but didn’t inform the lenders ( it was very early on to be fair, anything could have happened, luckily it didn’t and he’s now 18!).

Anyway, we got round this by basing the mortgage application on mine and my father in laws salary. So for the first few years the mortgage was in all 3 of our names. This was on paper only, we could afford the mortgage repayments comfortably by ourselves, no input from FIL. When we were in a position to be lent to just the 2 of us, we got a solicitors letter drawn up saying that father in law was removing himself from the mortgage and not expecting any financial benefit for leaving.

Might that be an option?

@theclimb i brought my first house at 19, renovated it and sold it for a profit hence why I have the deposit, I wasn’t with my partner then therefore I would not give him rights to the house, likewise I wouldn’t expect him to do the same regardless of gender.

@Pleasemakeitcorrect In my family if someone wanted to borrow money off you they’d say can I lend 20 quid. I know it’s borrow hence why I’m in a management role at 22 just a matter of speech, no need for the attitude😂😂

Can you afford the mortgage without your husband's income?
The reason he is excluded is starting your own business can be risky until it is well established
You need to consider that too.

We are looking to buy but are wanting to aim for half of what we could maximally get just in case and we have been in the same jobs for 20 years

For all of you who have actually gave me really good advice - THANK YOU

I will definitely be looking into some of the options recommended.

For those saying 22 is young to have a child, maybe in this day and age but most of my friends etc were born to their parents in their early twenties. I’m hardly 16 and pregnant. Also things don’t always go to plan… hindsight is a wonderful thing.

Childcare will never be a problem I have a massive family and none of my cousins etc have ever gone to nursery it’s just not something we do in our family but I appreciate everyone’s concern.

A few of you seem very bitter but I’ll leave that there😊

Honestly this is not a cost of living issue. You are 22, and from the bank's point of view you are a single parent to a 6 month old baby, in the sense that your partner has debts, evidently no savings, and an invisible income. And although the plan is for family to look after your baby for free, this is often the plan but rarely works out in real life.

There is no time a bank wouldn't have concerns about this situation, although in reality you would probably be fine since your partner presumably has more money in reality than he does on paper.

"A few of you seem very bitter but I’ll leave that there😊"

Interesting take on it! I would absolutely have hated having a kid at 22; there was much more I wanted to do before being tied down with that responsibility. I also wanted to achieve a point where I could afford a mortgage on a nice home and fees for a good quality nursery rather than needing a freebie.

I haven't seen anyone who envies your position; rather it's a case of being surprised at your naivety in not realising the costs that mortgage lenders factor into their policies.

Yes I would agree with this. From the bank's POV, you're a single parent. Therefore it would be too risky to lend (Sorry should I say it'd be too risky to borrow you the money ) you a larger amount. Buy a smaller house, It's what you can afford, that's that. It's naïve to think they should borrow you some more-they can't go by your own unique circumstances, if they did that for everybody the world wouldn't work.

You can't afford that house now. Buy one you can afford.

@lizzowhiz
”Needing a freebie” not quite the case. I wouldn’t send him to nursery as I’d much rather him be with family who I know I can trust. That’s mine and my family’s personal views on it, I know of friends who have had very bad experiences with nurseries. We’re not all the same.

As I said previously I brought a house at 19 I renovated it and sold it on… however my son does not tie me down… he is amazing and I wouldn’t change having him at 22. My post was mainly asking for advice while explaining the whole situation. Some how people don’t seem to realise that you can have a plan in life but if you get pregnant on the pill there’s not much you can do, and I wasn’t prepared to get rid of him having suffered a miscarriage previously. The naivety comes from a lot people on here thinking we live in a perfect world and things go exactly to plan.

Correcting my grammar does seem very bitter… that’s what I was referring to

In the nicest way, did you not think that having a baby would knock your affordability and in turn the amount you may be able to borrow?

I mean, if you didn’t think of that beforehand then you’re probably a little bit naive when it comes to money. Full time childcare from family is an unrealistic expectation and doesn’t work out very often for very long.

We did the same. Single wage outgoings just in case.

This isn’t true (last sentence).

Also, this thread has absolutely nothing to do with the cost of living crisis.

@PersonalityofaVacuum I totally see your point, to the bank I am a single mom on a single wage obviously in the bigger picture I’m not but they are not to know that.

I would honestly buy a cheaper house I’d love not to spend more money but majority of them need so much work doing it would cost a ridiculous amount of money.

Someone suggested my OH paying child maintenance so that’s exactly what we’re gunna do for the next 3 months… and obviously until the mortgage is accepted. That way I should be able to borrow quite abit more from the calculators online, that house may not be there but I’m sure something else will come up😊

Actually he can try to gain part via courts if he proves he paid towards the property as a partner. Not as a tennat most lilely, but partners can try to claim.

Well you have had a series of unicorn houses then haven't you

We don't have a mortgage but need a new roof, probably a rewire really and then to redo the plasterboard etc as someone did a very very bad job.

The house is almost 200 years old mind you.

We've also spent quite a sum on renovating, adapting to suit us etc. We don't intend to move any time soon (coming up to 12 years) but even with general increases in house prices, wouldn't recoup.