Very stressed about mortgage application. Can someone talk me down.

[Fuckadoodledoooo]

Applying in Dh name only as I don't work at mo as baby is 6 months (and when I did it was min wage and zero hour contracts, all eaten up by childcare anyway), so it was easier to take me out of the equation.

We want to buy a house for £172,500. Dh parents have basically given him his inheritance early as a deposit of £26,000.

Dh earns 31k. We have no debts at all, our credit card was paid off in January with some savings.

Only debt is his student loan which is 27k.

Our bills come to £560 per month, 3 children (one is now 18).

Only other income is £500 a month universal credit, most of which is housing element as we are renting so we didn't even take that into account as we wouldn't be getting it if we bought - although obviously they (habito) have seen it on bank statement so asked.

Going through Habito, we were turned down by everyone bar TSB because of his student debt.

We are now just waiting in Limbo to see if they will actually give us the mortgage for 147k. I'm terrified it won't happen. We've been in shitty rented houses for so long. We moved 120 miles last year to a cheaper part of the country so we could maybe buy.

Dh has a really secure job that he's been in for 8 years - it's quite a high up position but the pay is a joke as it's for a local authority. He's been working remotely for two years, so he doesn't need to
Change job even though we are 120 miles away. He only has to go in twice a month for meetings.

I'm so, so sick of renting. We've been given notice three times over the years as landlords have wanted to sell, and have lived in some awful places. Current rental we are constantly scrubbing black mould from the walls.

The mortgage he was offered would be £300 cheaper than our rent.

I know that no one has a crystal ball. I'm just clutching at straws trying to get some reassurance!

We used Habito for a smallish remortgage (on a house that we had paid off the mortgage) complication was self employed with credit card debit and car finance and actually found them very good. We got a mortgage through Nat West in the end.

Credit card 'debt'

It will be the deduction of the student loan making it unaffordable vs the amount of student loan unless you are adding it twice so deduction from payslip and also disclosing it as a loan

If your mortgage provider finds out you are going to be on the deeds the will not offer the case, I don't know any bank that would accept that as basically you have a claim on the property and that would interfere with repossession that why isn't not allowed

@Whymustyoubringinthebirds

It will be the deduction of the student loan making it unaffordable vs the amount of student loan unless you are adding it twice so deduction from payslip and also disclosing it as a loan

If your mortgage provider finds out you are going to be on the deeds the will not offer the case, I don't know any bank that would accept that as basically you have a claim on the property and that would interfere with repossession that why isn't not allowed

Yes it's because the student loan amount is never stable. He can do unlimited overtime, which is easy to do at a LA and working from home. So he can really rack up the hours some months and bring home a lot more money.

They won't take into account the overtime for the mortgage which is fair enough but the student loan coming out each month varies. I think that was the problem.

To be honest I don't care about my name on things at the moment. I know it will put me in a bad position if we split but to he honest, I've been down that road before in a previous marriage. And right now we have the sum total of Jack shit anyway.

Right now I just want to find away out of renting if we can. This might be a pipe dream but it's a glimmer of hope.

Our landlord has already told us he will be raising the rent if we renew in may/June. Rents have rocketed here since we moved here last year. I don't want to have to move the kids further away again to an even cheaper area. It really affected them.

I think it will be tricky these days for you to get a mortgage where you are on the deeds but not the mortgage. I think it was more common before but now it seems only one major lender does it (I think it was NatWest, if not it was HSBC).

We were looking at options recently. My job is not that lender friendly in the current climate and we could borrow more on 1 salary. But we could put me on the mortgage without impacting the lend amount if I was a dependent.

I'm really concerned to hear about the student loan impacting mortgage. I had been thinking best for people to pay off student loans (I was looking into helping a child pay theirs off early) but the advice I read said not to, only what you repay matters for a mortgage etc. Can't be that much on £31k. Hmm.

The advisor at habito said lenders are wary when the student loan payment varies.
Which it does depending on the overtime he works.
We probably won't get this one anyway. But we wanted to try and get one quickly which is why he just did it himself and not with me, we thought it would be easier and quicker and after I spoke to the mortgage advisor last year I thought we would just be able to borrow more.

Oh, if I could do my life over again!

Dh would earn more in the private sector for the job he does at the council, almost twice as much (finance) - but not up here. So we've shot ourselves in the foot moving from the SE from that point of view. We just didn't know what to do for the best.

I worked for Nationwide in mortgages for donkeys years and we were able to take into account half of overtime as long as it was regular, so there may be lenders out there that do. We applied for our mortgage 2 years ago and half of my husbands overtime was used.

Adding a second applicant who had no income would also have had zero affect on how much we would lend, unless the second person had a bunch of debt that had to be taken into account.

Agree with PP to find a different broker, it's their job to know the ins and outs of which lender would take into account different income streams. Have you tried inputting your details direct into some lenders affordability calculators online? Also have you tried with whoever you currently bank with, they can be more lenient if you are an existing customer, just an idea.

It used to be very much 'computer says no' with regards to income, you'd put the figures in and it would pop out a number but we did used to have the ability to stretch the amount if the applicants were able to prove that they had additional income that couldn't officially be used. There would be a few thousand that we could go over by if justified. Good luck.

We got a mortgage last year, and we were told by the mortgage adviser that DH could borrow more if it were just in his name and not in both our names as I didn’t work at the time.

I think you’re really going to struggle to borrow that much in this situation, I just got a Halifax approved. I got 170,000 total but earn over your husband (137), have a deposit of 50% and no dependants. I’m sorry but I don’t think it will be able to happen.

Could you look for a house that has the potential to be used as 3 bed in short term, even if not comfortably?

Sorry not 137! 37,000

@jiskoot habito approached 5 lenders. Only TSB would proceed.

We bank with NatWest. They would only offer 139k when we initially spoke to them - when habito did they said no due to student debt.

I don't think it's going to happen anyway.

Currently putting the feelers out with agents for rental properties for may so they can let us know when things come on.

He's raising the rent here while I'm scrubbing mould off my children's bedroom walls. No way we are staying if we can find somewhere else.

I know nothing of Habito, but can't help wondering if you'd be better off with a more personal mortgage broker.

Habito have approached 5 and all the lenders you have mentioned are mainstream banks?

There are smaller lenders that look at higher risk applications. Rates won't be as good, but if you want to buy you need a broker who can help get you the best deal with the circumstances you have to work with.

Our broker charged a fee but was worth every penny long term.

@Onjnmoeiejducwoapy

I think you’re really going to struggle to borrow that much in this situation, I just got a Halifax approved. I got 170,000 total but earn over your husband (137), have a deposit of 50% and no dependants. I’m sorry but I don’t think it will be able to happen.

Could you look for a house that has the potential to be used as 3 bed in short term, even if not comfortably?

Yes I've been looking at places that possibly have a separate sitting and dining room so that we could use one as a bedroom.

@SilverGoldfinch

I know nothing of Habito, but can't help wondering if you'd be better off with a more personal mortgage broker.

Habito have approached 5 and all the lenders you have mentioned are mainstream banks?

There are smaller lenders that look at higher risk applications. Rates won't be as good, but if you want to buy you need a broker who can help get you the best deal with the circumstances you have to work with.

Our broker charged a fee but was worth every penny long term.

Yes if this doesn't work out we will.

I usually deal with all the money related things but I've had a lot going on with a family member so I left it to Dh. He found habito and just went with it.

This has all happened so fast. PIL only offered the deposit last week as I almost had a breakdown over my family member and the stress of living where we are. The genuinely wanted to help me get out of the hole I'm in. Two weeks ago we never dreamed we could even get this far.

Op is there anyway you can move again?
Round here you could get a 3 bed house for less than that?

Are there other areas which are cheaper. Your rental situation sounds crap and usually mortgage is cheaper and you've a good deposit.

Not right now. We already moved Ds one term into A levels. It really knocked him. He's applied to the police here, the process is so long. He would have to start again with another force and he's got to finish year 13.

Maybe if he gets into this force and gets settled.

The student loan confuses me. Is it a govt loan, paid back via PAYE taxation? It should make no difference if so. Both DH and I have them and the lender couldn't care less.

@MerryDecembermas yes it's taken at source.

We got a list of lenders back and the reason they said no and it was student debt.

Which I really don't understand. In terms of affordability it means nothing to us seeing as we don't see it anyway, it comes out of wages.

We've cleared all other debts, don't owe a penny.

How frustrating for you.

Few pieces of advice

• some credit reference agencies allow you to register to get your rental payments added to your credit report, adding further reassurance you are a reliable person
• is there any way you could borrow an extra say £10000 from your inlaws and agree to pay that back over a period of time (not so much that it makes it unaffordable of course). Albeit if the lender knows it’s a ‘loan’ rather than a ‘gift’ that may cause issues so depends on whether your inlaws (and you) are happy classifying it all as a gift.
• stamp duty holiday has pushed up prices in many areas of the country. Are you assuming you will need to pay asking price? As it’s spring and more properties coming on you may find something else you can make a lower offer on and if you’re armed with a mortgage AIP for the max you can get, and no chain you will be in a good position

I feel for you, I really do. We were also in the rental trap for years

This is a sort of related question, how did you qualify for universal credit, I only ask because I was in a salary of £31k for 10 years and I’m a single parent but any salary over £26k wasn’t entitled to any assistance.

My outgoings are the same as a married couple minus 25% discount on council tax, please don’t be offended I’m just curious.

Re student loan for my mortgage I had to declare the amount coming out of my wages, I was never asked how much the debt in total was. Good luck, def work trying a personal broker for whole market, better deals are coming through now compared to last year.

*don’t feel you have to answer, I won’t be offended as I say just curious.

Try a different broker - am independent one. Money Saving Expert has a talk forum on property. There are lots of expert brokers on there.

Try London and Country or an independent mortgage advisor. They have access to more lenders, some of whom will take the overtime into account. And they can try with you on and off the mortgage.

That's nearly a 5x mortgage, 4 dependants, and a student loan. I think you will struggle to get approved. Sorry.

I agree. You're really pushing your repayment obligations to the maximum. This would cause me extreme stress. Consider the impact if interest rates rise, even slightly; or if your partner got ill or injured or lost his job.

Also, do you have enough on hand to cover stamp duty, solicitors' fees, possible mortgage fees (mine were £400 for broker and £1.5 for the lender), full homebuyers survey etc?
Can you reduce your outgoings in any way? Lenders need to see income, but also need to see outgoings to determine affordability.

If you do pursue this - get a good mortgage broker, they'll find you a lender if there are any who will approve you - i found Habito useless; reduce outgoings as much as possible; leave some money in a separate account as a buffer for unemployment etc.