To get a mortgage or not

[Marie324]

Hello
Looking for some impartial advice what on what to. We are currently renting and family of 5. Our outgoings are very high as we live in SE. Rent is £1900 pcm, food bill is £1000 per month and that's if we are strict, bills come to £1000 per month. We have one disabled child due to this claim £1500 in universal credit per month. My part time salary is 28k and my DH is 49k. We also get DLA of £550 and child benefit of £240 per month. This seems like a huge amount of money coming in but we honestly struggle every month and are in a lot of debt. We have a deposit for a mortgage which has kindly been gifted to us but means we will lose our universal credit allowance making us £1500 worse off a month. My post is basically to ask for advice on whether to take a massive financial risk in order to get a mortgage. The minimum we could get our repayments to is £1600 per month. My employer currently is unable to increase my hours. Any advice welcome. Thank you!

Why would you loose the UC? Wouldn't you just loose some of that if your claiming rent?
assuming you claim the carers element on UC aswell?

We would lose our housing allowance which is £1450

use the deposit to buy shared ownership then the rent is covered by uc?

Could you even borrow enough for a 5 bed house?

How are you spending a £1000 a month on food - does that include take aways etc?
You need to look at what you could afford to borrow on those salaries first and work out the affordability from there
there

We are currently renting a 3 bedroom so we are looking to buy a 3 bedroom or 4 bedroom home. Two of my DC share a room currently and my disabled child has his own room. Yes we could borrow enough for a 3 bedroom, 4 bedroom at a push but not a 5 bedroom house.

We are considering shared ownership as an option but there aren't many available where we are and we can't relocate due to my disabled child and his respite funding that's tied into our local authority

Will your UC not be affected regardless? Is there not a maximum amount of savings you can have around 16K.

How can you have a deposit but struggle with debt? Also a deposit over £16k would prevent you getting a lot of benefits wouldn't' it?
Clear the debt to reduce outgoings then you should be able to save the deposit back.

I don't think house prices are going up anytime soon, so I'd hold off being a first time buyer for now.

4bed presuming OP & DH share a room and they have 3 kids needing a room each.

Could you make it work if 2 kids room sharing for a while, and finding a cheaper 3bed property with scope to extend / loft convert later down the line when you have refound your financial feet again? I appreciate this might not be doable with a disabled DC but worth a consideration perhaps to open up your options?

And are there any debts you can pay off?

I honestly don't know but our weekly shop is £220 and then we have to buy extras in the week. I'm completely shocked how much our food bill comes too. Yes we have done many mortgage calculators and offered agreement in principle so we know how much we can borrow. It's just losing the universal credit feels like a huge risk especially when the lowest we could get our repayments to is only £300 less than the rent we are currently paying.

Yes we are considering this. Thank you

In terms of security in the future buying your own home is likely to save money even though you lose it initially. You need to weigh up the benefits long term and the risks involved.
food is very expensive right now but are there things you could do like going veggie five nights a week, look at one pot recipes etc and definitely cut out any takeaways or ready meals.

So we don't have the deposit yet but will do as it's being gifted by a relative at the point when we are ready to get a mortgage. Some of the money is going on repaying debts

Yes this is what we are thinking. But I wondered if it might be too much of a financial risk to take considering we struggle on our current income as it is. But also there is a risk of not getting a mortgage and renting forever which going into retirement would be very difficult.

Our food bill as a family of 5 is £250 a week cooking from scratch so I hear you. Your rent is so high I think I’d take the hit and get a mortgages at least you will always have a roof over your head

Especially if the mortgage is cheaper than the rent. In the long term with retirement planning in mind, too.

Your incomes may well both go up as your progress through your careers or change jobs/increase hours if possible, too, so the initial impact might not be as daunting for the term of mortgage.

Yes I keep thinking we should just take the hit so have have longer term security. Just not sure what else we could possibly cut back on to save money and make it doable! Unless I get a second job but then the kids really need me at home. It's so hard.

Claim the carers element on UC. Whilst not as much as what you're getting from them for rent it's still an extra £200 a month.

I'm pretty sure we already claim this. Thank you though.

Buying a house will make you 300 better off, you said some of this gifted money will also clear some debt so freeing up more money.

Also remember mortgage rates are likely to fall in the coming years so repayments will lessen.

I would be looking at 3 beds and youll be surprised how many will have already gone into the loft (although wont be officially classed as a bedroom for building regs)

Personally I think you would be mad not to buy to give your family stability from the madness of the rental market just now.

£220 a week in food is barmy. ChatGPT is good for suggestions of menu planning and shopping lists. You should easily be able to get that down to £150. Unless you have specific diet to cater for your disabled dc?

@Marie324 gave you factored in the additional costs that come with being a homeowner? Off the top of my head:

1. building insurance
2. annual boiler check
3. repairs and maintenance - pipes freezing, plumbing, anything to do with the roof can cost a lot
4. cost and maintenance of white goods, fridge freezer, washer, dryer
5. garden work and boundaries like fences and walls

The problem is we won't be 300 better off as we lose our universal credit housing element which is 1450. I know we are desperate to get on the property ladder as we are approaching our 40s but cost of living is so extreme especially in the South that I do not know how we'll manage.

Yes we have additional extras for my disabled child which increase our costs. I need to have a good look at how we can cut our food bill.