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Original poster

Will we be able to get a mortgage at all???

51 replies

DopeyDawg · 03/02/2015 14:35

Cant seem to get any Indy Mortgage people to call me back so am asking here.

We want to buy a house. It is a Repossession.
Bank wants oiro £107.5K
We would initially offer £100K
(it last sold in 2007 at top of market for £160K).

We have low deposit of £10K so would need a mortgage of around 90K or 90% over 18 years as H is 49. We are not first time buyers. We have no history of poor credit.

Income: H: 26K gross. Me: just DLA and child benefit so around £700 pm.

We have 2 kids - 10 and 7.
also £10K on credit cards (int free atm).

Do we have a chance, do you think?
Will the credit card debt scupper us?
Can we not mention it, or would that be very stupid indeed?

thanks, if anyone can offer advice?

OP posts:
Nolim · 03/02/2015 14:37

No advice but watching with interest

CogitoErgoSometimes · 03/02/2015 14:44

The questions you're going to be asked before anyone approves your application will not just include outstanding loans and income but also regular outgoings and quite a few other bits and pieces. When I applied for a mortgage extension last year the interview process was pretty lengthy. If you have an ongoing relationship with a bank it can be worth approaching them as a first step, just to give you an idea if what you want is reasonable.

Original poster
DopeyDawg · 03/02/2015 14:48

thanks, Cogito, that's a good idea.

OP posts:
nottheOP · 03/02/2015 14:51

I always recommend London & country. They're fee free and very efficient ime.

atticusclaw · 03/02/2015 14:53

I would be surprised if you found one very easily TBH. Your DH will have to work until he's 67 (which is no guarantee since health issues often mean this doesn't happen) and you're asking for 3.5 times his salary. Your payments will be higher due to the shorter than usual term on the mortgage. Plus your credit card debt will work against you.

All you can do is ask though.

atticusclaw · 03/02/2015 14:53

have you been onto any bank websites and used their online calculators?

OnceUponATimeAgain · 03/02/2015 14:57

Try London and Country for advice, they are doing my remortgage and seem really nice - i was stumped (and very stressed) as when we got our mortgage to start both of us were working, and trying to remort on single salary was proving extremely hard)

atticusclaw · 03/02/2015 14:59

Just plugging your figures into the HSBC website (and ignoring the credit card debt) and assuming outgoings of £500 per month it says they would lend you £76k.

With the credit card debt it says they would lend you £16k.

nikki1978 · 03/02/2015 15:00

I think you will struggle because of the 18 year thing. Although I think you can get it longer than that. You should he able to get at least 21 years. The debt won't help but you might be able to do it. Find an ifa to give you an idea of what is possible.

nikki1978 · 03/02/2015 15:01

I put your numbers into the santander site and with the debt it says they would lend £63k.

atticusclaw · 03/02/2015 15:02

If you add in your DLA and child benefit then they'll lend you £54k (due to the cc debt).

You need to get rid of the cc debt.

Bearbehind · 03/02/2015 15:14

Will the credit card debt scupper us? Can we not mention it, or would that be very stupid indeed

It's been a long time since you last applied for mortgage if you think this is even an option Hmm

Banks no longer accept your word on what you think you can afford- it is very meticulously checked.

As already suggested- put your actual details into online calculators and see what they say but I think you will struggle.

Having £10k debt on £26k income with 2 dependants looks like you live beyond your means and banks won't lend if they would be irresponsible in doing so.

Also, if the property is a repossession, there's no guarantee you'd get it for £100k as they have to get the best price for it so your offer would be published for others to beat it if they choose to.

Then there's the solicitors/ survey fees on top of the deposit.

Original poster
DopeyDawg · 03/02/2015 16:16

We have not applied for a mortgage since 2004.
Clearly things have changed.
We have a mortgage of 136K at present so it is a shock to find we would struggle to get one of 90K.
We have no childcare costs, don't eat out, take holidays etc.
Will we have to 'prove' that? Confused

OP posts:
atticusclaw · 03/02/2015 16:21

Yes. They spend ages and ages going through every outgoing with you. The reality is that your debt is more than a third of your annual income. I agree with the pp, it looks like you live way beyond your means.

You would be better off looking at whether you can port part of your current mortgage. Presumably new house is worth much less than current house though and so the existing lender is going to have concerns.

Original poster
DopeyDawg · 03/02/2015 16:25

Yes have lived beyond means.
Bought money pit house then became disabled and unable to work.
Struggled to sell house for cheaper way of living.
Then Govt decided to stop my benefits as our income is 'too high'.

sorry, don't mean to sound bitter (but I am ).
Just trying to find a way out of this mess.
We have years of paying our mortgage on time behind us and keeping up with debts, I hoped that would count for something :(

OP posts:
nottheOP · 03/02/2015 16:25

You have to show that you can afford the monthly repayments if the interest rates go up. They look at all commitments and statements for the last 3 months to decide.

It's all affordability rather than income multiples.

They don't like credit cards as balances indicate bad budgeting and interest rates can go up, a lot.

Either way, all lenders criteria vary so a broker can look at all of their affordability calculators before they send off an application.

By way of example, nationwide would lend us £95000, Halifax would lend £280000!!

nottheOP · 03/02/2015 16:28

Sticking to your credit agreement and being in time with payments does count for something. We have 2 car loans & a consolidation loan and got our mortgage fine

Bearbehind · 03/02/2015 17:13

nottheop your debts must have been deemed 'affordable' based on your circumstances.

For example, someone with £10k debts on a £100k salary is a very different proposition to this scenario.

In this instance, based on what the OP has said, her debts, lack of deposit, number of dependants, high LTV and fairly low income will all weigh against her.

atticusclaw · 03/02/2015 19:19

The other issue is can you even afford this mortgage? Your credit card debt won't be interest free forever and the interest rates on the mortgage are likely to increase over the next five years. If your mortgage payment doubled where would you get the money from.

I suspect if you managed to get a mortgage offer they'd want it repaying over a very short period and this is unlikely to be affordable for you since it will make the payments higher. I'm sorry to be negative but your husband has a relatively low income and his age and debt will count against him. I think you need to be realistic and also not put yourself in a position where you could find your home being repossessed because you can't afford the mortgage when the rates go up.

There's never any harm in asking the question though.

Jackieharris · 03/02/2015 19:26

No one gets the mortgage deals they got in 2004.

I bought in 2006 and even with a much higher income now I wouldn't be allowed to take out that same mortgage given the new rules (even though I've never defaulted).

Tbh the best financial thing you can do atm is to use the £10k deposit to pay off the credit cards and use what you are saving on repayments to pay off your current mortgage quicker.

Bearbehind · 03/02/2015 19:31

I'd assumed the £10k was the equity in the current house, so not available for debt repayment, although if that's wrong, I think that's the best option too jackie

Original poster
DopeyDawg · 03/02/2015 19:54

No, cant stay in current house anyway.
I am disabled and it cannot be adapted.
I need to move somewhere more suitable (which the cheaper house is).
I don't have a 10K deposit until I sell this house, so cant pay off the cards yet anyway.

I had DLA plus ESA. The Govt have stopped the ESA on the basis of H's wage (too high!). The DLA is now needed for food. I have been waiting for an operation for 15 months to allow me to walk properly and to help with pain etc so I can look for work again.

Thanks for input.

I'll call Which Mortgage and our current provider tomorrow and see what they say but it doesn't look good, clearly.

OP posts:
cathpip · 03/02/2015 19:58

If the DLA has an end date on it and then you have to do the renewal process they will not count it towards your monthly income. We have just had this, they insisted on seeing all the paperwork and then discounted it as it had a renewal date on it.......

Original poster
DopeyDawg · 03/02/2015 20:00

No, it is 'without limit of time' but thanks, that is a good point.

OP posts:
atticusclaw · 04/02/2015 08:09

I think your best option is talking to your current mortgage provider and finding our whether you can port your existing mortgage (whilst paying off the excess).

You currently have £136k with 10k equity (93 percent LTV). If you port this to a house with a 90k mortgage (paying back the 46k) and put back the whole of the £10k into the new property as a deposit they may allow this since they now have less financial exposure and a slightly lower loan to value ratio of 90 percent.

Can you afford the moving fees though?