Advice re preparing to apply for mortgage and managing finances please

[pastaofplenty]

Bit of a complicated situation which I am trying to get my head around and would value advice/personal experiences if possible please.

To be brief:

We (DH and I) own a mortgage-free house abroad which we are looking to sell within the next 18 months. It has been valued independently and if it sells (slow market at moment) we can expect to get about £70,000 (fairly conservative estimate).

At present we are renting in the UK. We do not own a property in the UK although have had a mortgage here before.

I work full time and have a permanent job (held for two years)

My salary is paid into my own account, whilst DH and I also have a joint account into which his private pension is paid.

All utilities, rent etc. come out of my single account (I set this up when I started work as it was easier to manage money and out-goings whilst DH used the joint account for covering costs of living abroad - he has now moved over to live with me permanently and the costs for house abroad are minimal).

In the next two years we want to get a mortgage to buy a property in UK - using money from (hopeful) sale of house abroad as a deposit. I am in my mid-40s so would look for a 18 year term mortgage. We are waiting until I have been in my job for three years (on advice of friends) before applying for mortgage as told that 3 years payslips are best.

DH is 20 years older than me so we think that realistically it may be best to just apply for the mortgage in my name (but he will be on deeds etc....)

So my question is this:

Should we continue with separate accounts to make a mortgage application in just my name stand a better chance of acceptance?

It seems daft not to pool all our resources back into the joint account as it would make it look a lot healthier but I wonder if this is a simplistic approach?

We do not have many other outgoings (low credit card debt) and no other loans or anything so I'm presuming the mortgage application would be straightforward (here's where I tempt fate!!)

I am on a healthy salary and DH also has a guaranteed pension income (20K plus) - I am also entitled to half his pension should he die (not nice to think about but is a bit extra security for me and DD)

So in this situation what should we do - stick with my account, pool everything or is there a middle way?

Friends who have recently applied for mortgages tell me it is a minefield with finances looked at with a fine-tooth comb. I just want to be prepared for when we are ready to move. I am on the electoral roll, have checked records with Experian and all seems fine and am not aware of anything that could "hinder" plans.

Thanks for reading this far and any advice greatly appreciated.

Best advice here would be to go see a mortgage broker to put your mind at rest but TBH I can't see anything here that would cause any issues?

You're going to have problems taking a mortgage out soley in your name only and giving him a vested interest in the property ie putting him on the deeds. Also, you cannot use any of his income if he is not on the mortgage or any if his financial for that matter. Given his age he is unlikely to get a mortgage beyond a five year term so you have no choice but to do it alone. You will need to go speak to an experienced mortgage broker and probably a conveyancer too.

Thanks both

Simplydivine05 - what's the difference between a broker and a conveyancer please?

DH is happy not to be on deeds if that makes a difference and we wouldn't rely on his income for mortgage so hopefully that shouldn't make a difference - or would it?

A broker does the mortgage application, the conveyancer takes care of the legal side of it and takes care of sending your money to the seller and signing contracts. You could do it without him on the deeds but you could draw up a legal agreement between you that recognises him to be contributing towards the mortgage payments. You should also make sure you have wills in place. If he isn't a named owner and something happens to you, if you have kids the house will automatically go them them not him, despite you being married.

Thanks Simply - that's very helpful.

As others have suggested, you need to see a mortgage broker.

You haven't indicated how much you're looking to borrow or your salary so it's impossible to tell if you're even in the right ball park.

The fact you have a daughter will also reduce what a lender deems is affordable to you (assuming she's still dependent).

Likewise, if your DH isn't on the application but will live in the house, he'd likely be considered a dependent too, further reducing your affordability,

There are lenders who will allow terms to run passed retirement aged with a guaranteed pension.

Thanks Bearbehind - looks like a broker is the next step.
For info DD is now independent.
Salary is circa £45K and I was looking for LVA of around 60% so max house price about 200K and if possible getting a mortgage loan of about 120 - 150K.
Would DH be considered dependant if he had his own income (not used for calculating mortgage)?

Different lenders will view your DH in different ways- that's why brokers are invaluable in less than straightforward applications- they know which direction to point you in.

Have a play on the affordability calculators of the major lenders and that will give you an idea of what is achieveable and how your shortish term will affect things.

Great - thanks Bearbehind really appreciate your help.
One more query - sorry to be a pain - if we are not actively looking for a mortgage for say another 18 months, are we wasting brokers time by approaching them now?

You don't need three years payslips, that's nonsense, they only ask for three months. Three years accounts is for the self employed.
They will write to your employer to confirm your job.
Your husband can't be on the house deeds and not on the mortgage, the mortgage co won't allow that.

I suggest you sound out a broker for some advice.

I don't know why a PP said the house would go to the child if DH not on deeds, if no will - that's incorrect.

You should have a will and if DH not on deeds (there's no reason for him not to be on the deeds AND the mortgage btw, I am on both of ours but we only took dp income into account because I am self employed, this isn't difficult for mortgage companies, how do you think they deal with non working parents, for example? It's fine for him to be on there, makes it a lot simpler) but no will then rules of intestacy apply whereby spouse gets x% of estate first, then kids and spouse split the rest 50/50. I can't recall the % but it's all outlined simply on the .gov website.

He cannot go on the mortgage because of his age. And yes the house will go to children not spouse if no will is in place. I know this from bitter experience.

Why does it? Those are not the rules of intestacy. Unless you mean it has to be sold so the estate can be properly split to apply the intestacy rules.
There is nothing in the rules of intestacy that says if you are married with kids your house goes to the kids.
That's just not the rule.

And it's up to the mortgage provider if they put him on the mortgage despite his age. But what he CANNOT be is in the deeds and not in the mortgage. The mortgage co won't give a mortgage on a house part owned by someone who has no responsibility for the loan they have provided against it.

The 3 year payslip thing is for self employed people. 3 months is fine for employed people.

If you can clear your credit card before applying then that would maximise the amount that you can borrow.

I think he can be a silent applicant on the mortgage - and therefore on the deeds, but his income is disregarded. This is what we did with my DH who didn't have any accounts when we applied for our mortgage - it was all based on my income, but they knew he existed if that makes sense. A broker will definitely be able to help.

Of course he can go on the mortgage and deeds even if his income is not taken into account. I was a SAHM for years and was always on both.

And outtogetyou is entirely correct about the house not all going to DC if there is no will.
It's only if you're not married and not on the mortgage that DC get everything, with no will.

Please get proper advice OP.

Or if the kids are his, not yours, which it suddenly occurred to me someone could have meant.