Help - mortgages and UC

[Trying62]

I'll try keep this short. I'm 36, 2 young DC and nearing the end of a divorce.

The house has only about 10k left to pay on it. I'm currently renting. I earn approx 28k before tax (full time) but I'm negotiating cutting my hours down as eldest DC now in school and it's just not feasible. I'm already paying childcare for the youngest, I cannot afford after school care (also it's been over a year and we're still on the wait list).

I get UC because well, childcare and rent takes up most of my wage (although it'll be less now 3YO funding has just kicked in).

This is the problem. When the divorce is finalised I'll get the sum of money from the house. Using the mortgage calculators on even the cheapest fixer-uppers for the longest term, it doesn't look like they'll lend me the money. I'd need to save for a bigger deposit. But my UC would (understandably) stop. Saving would be impossible because I'd then just be burning through that divorce money to live. I know how to save, don't ask what can be cut because it's already been cut. Is that just it then, lose out on the future deposit? It just seems like such a bloody waste but I have no idea what to do. I would love to buy another house and get off the UC again but it doesn't seem feasible does it? Should I just put the money in trust for my DC?

Guessing that you really cannot find an affordable place using your settlement and a mortgage after getting best mortgage advice. If so I think you're left with little option to burn through the capital until you're down to £16k.

Do you owe anything on loans like a car or credit cards you could pay off?

I'd be careful about any arrangement to put the cash in trust; risk of being accused of depriving yourself.

Unfortunately it doesn't seem so, I just don't earn quite enough (plus age, 30 year mortgage doesn't appear to be an option?).

No debt, no loans, nothing on finance.

That was my fear, obviously I don't want to "hide it" but I'll just maybe have to come to terms with renting forever. I naively thought with the house being nearly paid off that ex would just go 50/50 and not argue/ chase after every single pound but hey ho.

You need to speak to a good mortgage broker.

A 30 year mortgage should definitely be possible at your age, as you have over 30 years left to retirement.

Some lenders will take into account different types of income e.g. child maintenance, if your ex is likely to be reliable paying that.

Could you afford a flat rather than a house?

Look into shared ownership and then over pay as much as you can. You also need to stay in full time work.

I'm 52 and last year I got a 23 year mortgage. Definitely speak to an adviser.

If you get a shared ownership property uc will still pay the rent!

I bought shared ownership after my divorce and I get UC help for the rental portion. - it's not very much but it helps!

I’d never considered that! Will they pay it at the same time you’re covering the mortgage payment?

Shared ownership would work well for you, and UC pay all of the rent element

is buy the largest % of a shared ownership property that I could, with the aim of stair casing to 100% when I could work more hours in future.

Talk to Citizens Advice. The money won't be considered "savings/capital" straight away as long as you declare its purpose to DWP and keep it ringfenced ready for your mortgage. You won't automatically lose UC if you're using it towards a mortgage soon.

Otherwise, definitely don't just spend it frivolously as DWP will consider it deprivation of assets and you'll remain off UC.

Thank you everyone! Never heard of shared ownership so that's a new one.

There's no maintenance, we're 50/50 with the kids.

It was flats I was pricing for, they tend to be 20k cheaper than a 2 bed house. Which seems ridiculous tbh. (Going by flats I see for sale, and the value of my 2 bed house and others on that street). But anyways.

I've struggled on for 6 years working full time with the kids, now it's just not feasible for me or my very understanding management. There's zero after school childcare, it's expensive as hell and I can't just continue to arrive 30 mins late and leave 2 1/4 hours early every day I have the kids. My mum has been helping when she can but she still works, and I've been sneaking off on my home working days. It's stressful and I'm so burnt out. I'm at least very close to my work and I get very good holidays which cover summer etc. (Although always on the lookout for something that works better).

Ok just saw shared ownership is through housing associations. Not holding out much hope there'll be anything available haha (the main one has 2 available in the whole county) but I'll apply anyway.

You might be able to get a resale - also through a housing association but maybe less popular.

I’m another one who has done shared ownership when I had the same dilemma. I used all the equity from the house sale as a deposit so I only needed a small mortgage and UC also pay the rent part.

There shouldn’t be any problem buying one as it sounds like you’d qualify. Some shared ownership properties will be on Right move or you could try the share to buy website
https://www.sharetobuy.com Or individual housing associations websites

I'd look into shared ownership. You can use your equity to pay for your share outright and then UC should help with the rent part.

And the rent on the share of the property that you're not buying should be included in your UC calculation, so your UC should go up.

Surely you're getting at least a £50k settlement from the house sale?

Is there no possibility of you staying in the family home?

UC is very unfair in not allowing you to save to buy a house.

(You could do this under tax credits)

The only option seems moving to a cheaper area to buy?

I'd do anything you ca. to buy. Look into shared ownership, move to a cheaper area, buy a smaller flat, keep your full time hours. If you rent and the deposit goes on living you won't stand a chance of buying again. You may need to have a hard few years but it will be worth it.

We offer a 40yr term at a well.known hight street bank. Talk to a broker.