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Original poster

Could we get a mortgage....

35 replies

Monkeyandanimal · 13/04/2014 12:53

....I am resigned to never owning our own home, but DH is getting really depressed about it. It is annoying because we are paying £1000 / month in rent. I don't want to go to the banks right now as I have a feeling the answer would make us more miserable, as i really don't think we have a hope...But as DH is getting so down, I thought there is no harm asking on here.

I am not working as we have 3 small children and even if i could get a job good enough to pay for childcare for 3, I wouldn't want the kids in full time childcare anyway. And if we wouldn't be financially better off then I don't see the point. I hope to return to work in some capacity when my 4 month old is 3.

DH is on about 25k a year, and that will hopefully reach about 28k by next year.

My parents are also desperate for us to buy, and are itching to give us some money towards it; I haven't discussed it with them, so don't know how much, but I think they could give us 30-40k, maybe more if necessary....

We are in an expensive part of the uk (SE)....so what do you think our chances are? If there is a glimmer of hope I'll try going to the banks, but I don't want to go only to be laughed at!

Please be kind even if the news is bad!

OP posts:
TypicaLibra · 13/04/2014 13:00

Is your DH's job the kind that could be done anywhere? Could you relocate somewhere cheaper?

In answer to your OP I really don't know, but if you're in an expensive part of the UK, and with three kids I guess you'd need at least 3 bedrooms - I don't rate your chances sadly.

Original poster
Monkeyandanimal · 13/04/2014 13:05

That's what i thought Libra. If there was a job North we could potentially move, but these jobs don't come up very often, and we like it here anyway.....

OP posts:
Bearbehind · 13/04/2014 13:44

Could you get 'a' mortgage - yes.

Could you get a mortgage on a house big enough for a family of 5 in SE- extremely unlikely.

Absolute maximum borrowing is likely to be 5 times income which would only be £125k and that's before the cost of 4 dependants (you and the 3 children) is deducted from your affordability calculation.

Also the deposit being a gift from the family will potentially limit what you can borrow as you haven't saved it yourselves.

There are new regulations coming out at the end of this month (many lenders have already introduced them) and lending is now focused on affordability not income multiples.

If you aren't considering relocating then I think you are going to have to give up thoughts of owning a home until you can increase your incomes.

mercibucket · 13/04/2014 14:58

ask parents to get a mortgage instead and you pay them the rent?

Bearbehind · 13/04/2014 15:02

Unless they are very well off merci that is unlikely to be possible. All 5 of the family are likely to be classed as dependent on the parents in that situation and the parents would have to have sufficient income (and duration until retirement) to fund all their outgoings, any mortgage they have, the new mortgage and all 5 of the family in order to pass any affordability checks.

Baabaapinksheep · 13/04/2014 15:29

Could you buy a shared ownership house? If you owned say 50% then with a mortgage of £120k and deposit of £30k you could theoretically buy a house worth £300k.

Bearbehind · 13/04/2014 16:19

You have to pay rent on the other 50% baabaa and there's no way they can afford a £120k mortgage and plus rent on the other half on a salary of £25k with 3 children

JumpingJackSprat · 13/04/2014 16:24

It depends if you're fussy about the area or house you live in. If you could afford £1000 a month on rent it might be possible on a 5% deposit. Go speak to a bank - santander apparently are the most stringent so if they won't lend to you then you probably haven't got a chance. But speak to a mortgage broker.

Timeandtune · 13/04/2014 16:35

Have a look at the Help to Buy scheme www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans

and speak to a mortgage broker rather than going to a single lender. Check out www.unbiased.co.uk to find someone.

Hang on to all pay slips and bank statements / utility bills etc

hercules1 · 13/04/2014 16:44

I can't see how you can buy. You don't do paid work and have 3 kids and your dh doesn't earn enough. Sad really that years ago you could probably have bought a home but those days are long gone. We had 1 dc and we bought through shared ownership first with both of us working. Years later after our wages increased we were able to buy it fully. By that point we'd had dd and the house was only 2 bedrooms. Eventually we did internal work and converted the 2nd room and upstairs cupboard into box room for dd.
I think you have to be realistic about what you can buy. I don't suppose many people buy 3 bed house straight off- could be wrong though.

Bearbehind · 13/04/2014 17:48

I'm guessing you mean Santander are the least stringent not most otherwise there's no point in trying them jumping.

Being able to (or more likely having to) spend £1,000 on rent has no bearing on what mortgage the OP's DH will get.

The OP asked if she'd be laughed at if she went to a bank and the fact is- she would be unless she can find a family home in the SE for about £150k- which isn't going to happen.

Even that is pushing it and assuming about £50k from parents based on the fact the OP's DH has 4 dependents and only earns £25k

Baabaapinksheep · 13/04/2014 18:19

Bearbehind - yes but the rent plus mortgage repayment are unlikely to be more than £1000 per month. I'm in the South and with a 50% shared ownership here for a 3 bed the rent is approximately £200 per month.

The best thing to do is see a mortgage advisor, they will be able to tell you what mortgage you will be likely to get so you can work out what you can afford. I never thought I would be able to get a mortgage, but I can!

Chewbecca · 13/04/2014 18:25

You won't be laughed at, you are just gathering facts. There's no harm in going to the bank and finding out how much you could comfortably borrow.
You can then use that information to look at property websites to find out what, if anything, you can buy within a location range. Then, if you want to go down that path, you would know how much the gap is between what you can borrow and what you need that perhaps your parents might be able to help with.
You've nothing to lose, you're just finding out the facts.

JumpingJackSprat · 13/04/2014 18:49

Nope most stringent- everyone else will soon have to come in line with the level of scrutiny santander will do ( according to my mortgage broker) so you might get a yes now but in a couple of months they might all just shut the door in your face. Depends how far South and east you want to go but you would get a small 3 bed house in one of the coastal towns for 150k.

Bearbehind · 13/04/2014 18:49

But even on a basic tax code £25k per year is only £1,662 per month and not all lenders take Child Benefit etc into account.

No mortgage lender will even consider a mortgage/ rent repayment of anything close to £1,000 per month with 4 dependents on that salary.

You don't need to go to a bank to get an idea of what they'll lend you. They all have affordability calculators and a quick scout around Rightmove will give the OP an idea of what a suitable property will cost.

£25k with 4 dependants would be a stretch in most areas- it's not even worth entertaining in the SE.

TBH, I'm impressed they can manage now but the new lending criteria means that 'managing' isn't an option- you have to prove you can afford it even after factoring in interest rate hikes.

Bearbehind · 13/04/2014 18:51

Strange outlook there jumping surely it's better to try the most lax of lenders before deciding no one will lend to you? Hmm

JumpingJackSprat · 13/04/2014 18:52

Where in the South East are you op? If you're in central London then no you have no chance but if you're willing to move out of there then you might. Is worth asking someone. I mean I wouldn't have thought you would get a mortgage but they might offer you something? My advisor told me about springboard mortgages where your parents become guarantor. That might be worth looking into?

JumpingJackSprat · 13/04/2014 18:56

In a month or two the lax ones will have to come up to the sort of standard employed by santander. So although op mightget a yes now in a few months she may not when standards are revised. That's why I said try them. If you get a no from them then it should be a no everywhere. Or id have thought anyway I'm no expert!- just going by what my financial advisor and 2 mortgage brokers told me. They all used santander to give an indication on my situation of whether when I come to apply for a mortgage after the end of this month whether I will be approved regardless of who I go with.

Preciousbane · 13/04/2014 19:01

This reply has been deleted

Message withdrawn at poster's request.

Bearbehind · 13/04/2014 19:04

I've just put OP's details into a main stream lenders website (which has been updated for the new regulations) and based on them both being 30, with 3 children under 5 and planning to retire at 70- they can borrow just under £62k.

It's bonkers trying the lenders you know are going to be more strict but this is a 'middle of the road' lender and just shows how unattainable the OP's DH aspiration currently is.

Bearbehind · 13/04/2014 19:05

Meant to add- the search I did was also based on having zero debt anywhere else.

CaptWingoBings · 13/04/2014 19:09

We are in a similar position - DP earns around £28k, me SAHM, two children, we were told we could borrow £70k. We had a £80k deposit & have bought a place for £150k. In the North obviously.

addictedtosugar · 13/04/2014 19:22

So much for Santander being the most stringent - it let me put in you were taking 2,000 in child befit (yes, specified), and would lend you 90k, if you had a 30k deposit - tho I don't know how gifted deposits work.

They also "offered" to lend us (using real numbers) a phenomenal amount I wouldn't even want to contemplate having to pay back, unless we moved to central london by necessity, and bought a tiny flat.

How much would the smallest house you could live in cost to buy in an OK area, Monkey?

GoatsHaveStrangeEyes · 13/04/2014 19:32

Well to put it in perspective. Dh earns about the same as op's dh. I work part time and earn 5k a year. We have 3 dc's.

We got a mortgage with nationwide for £129,000. Had a 10% deposit and bought a house for £145,000. Mortgage costs us £570 a month.

So it could be doable with a big deposit as your ltv would be better. I'm not sure what you could get for that in the south east, I live in Cornwall so not cheap but not extortionate.

Bearbehind · 13/04/2014 19:37

goats you earning £5k a year makes a massive difference.

You go from being dependant, ie reducing the borrowers affordability, to contributing towards a higher loan.

There's a huge price variance between the south west and south east too. £145k would barely get a 1 bedroom fiat in the majority of the south east.