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!

I used two different brokers, unfortunately they have both said that Halifax were the only one willing to lend me that much, others were all around 5k less. So I’m not sure if you will find someone willing to go higher.

But I really don’t understand the student loan issue, it sounds like there has been a miscommunication somewhere on that?

@FAQs

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.

I assumed we wouldn't get any help from UC here.

When we were in London, we had help from housing benefit even with us both working because rent (on a similar shithole) was three times as much.

I was chatting to my midwife and she was taking about UC as we were renting. Called them, submitted everything they asked for and we were stunned that we were able to get some help. All above board, they know exactly what comes in from HMRC and adjust it for any overtime etc.

I’ve only skimmed the thread but lots of mortgage providers work on 3.5x joint income or 4 times income
So when one income is 0, you get less when you apply as a couple.

OP, you really need to speak to a good whole of market broker like London and Country.

Doing lots of soft searches with individual lenders is going to damage your DHs credit rating so isn’t a good idea.

Habito isn’t really set up to deal with non-standard applications so I wouldn’t use them for now

@LalalalalalaLand123

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.

We have some saving that would cover everything. Like I said we are very frugal. And Dh overtime uncapped really helps (also helps that he loves his job and would work 24/7 if he could).

And also for fees, if we couldn't cover it Dh parents said they would. We're very lucky they are wonderful.

I have to say I’m also quite stunned you get 500 quid a month benefits when he is on 31k plus 12 hours a weekover time.

In that case OP, I would suggest trying another broker. I found mine - an absolute gem - via the Money Saving Expert (or Moneysupermarket?) website, a local brokerage firm. They had a fee, but it was only charged if they found you something. Definitely worth the fee. They had to fiddle around with number of repayment years to get affordability right. Good luck OP!

@Bluntness100

I have to say I’m also quite stunned you get 500 quid a month benefits when he is on 31k plus 12 hours a weekover time.

Some months obviously it's less than £500 depending on overtime.

But yes. I was stunned too. We've been through everything with them. They get their figures from HMRC.

We were stung with tax credits messing things up a few years ago and overpaying so I made sure it was all correct this time to the point where I think I was annoying them.

And to be fair, there's not been that much overtime these past few months with a non sleeping baby and me barely holding it together over my relative.

@FAQs the op has several children and another adult to feed and also says its higher based on housing element

@FAQs don't they also look at council tax as well and 25% more could be £50 or more a month

@Iamsodonewith2020 yes, it's mainly housing element. Which is why we didn't put it towards income for mortgage as we wouldn't be getting it if we owned a house.

So Dh had an online chat with habito. Yes we would get less if I was on the mortgage due to multipliers with most lenders they work with.

If we don't get this, we'll try a mortgage broker at some point.

Or wait until I get a job - (will probably go back to care work when the baby is nearing one, will need to work nights again to save on childcare, it's a fucking killer to be honest I did it from when my now 7 year old was one).

When we looked at mortgages the first time I was still working. Wage was so crap that it didn't really make a difference. We looked again when I wasn't working - there was no point me being on mortgage we couldn't borrow enough.

We'll have to see what Ds does with the police and maybe move further north again.

And I know it's all our own fault. Dh with his LA crap pay job, me with my no prospects and having 3 children over 18 years. I didn't want to end up like this at 41 but it is what it is. If I could turn back the clock and all that.

In the meantime we'll look for better rental properties than this.

The bank will probably not allow you to go on the deeds. We have just bought (finally at age 40) due to being gifted 15% deposit from DH family. I was on furlough plus had an old settled default on my credit file so we left me off the mortgage. The bank insisted I sign a declaration stating I have no interest in the property and would vacate of house was repossessed. We are married so I’m not worried about not having any claim on it in a divorce.
We got a mortgage with 3 kids and a car loan, car lease and credit card debt.
Mortgage was for 3.3 times DH income. So we weren’t pushing things on affordability.

And also Dh was horrified when I said about me not having protection not being on the mortgage if he left. He's not trying to pull a fast one. He's just trying to get us out of a mess.

I deal with all the finances (until this but I've been in a world of shit and can't cope with a mortgage application too). We only got our account made into a joint one a few years ago - it was my account before I met him all in my name that everything went into.

@BrieAndChilli

The bank will probably not allow you to go on the deeds. We have just bought (finally at age 40) due to being gifted 15% deposit from DH family. I was on furlough plus had an old settled default on my credit file so we left me off the mortgage. The bank insisted I sign a declaration stating I have no interest in the property and would vacate of house was repossessed. We are married so I’m not worried about not having any claim on it in a divorce. We got a mortgage with 3 kids and a car loan, car lease and credit card debt. Mortgage was for 3.3 times DH income. So we weren’t pushing things on affordability.

I'm past caring now about deeds. I just want somewhere more secure. I hate renting.

See, we have no debt. Not a penny. But yes, I understand that it's too much on his wage.

I naively thought no debts and a 25k deposit would be okay.

Buy somewhere cheaper and smaller with a kitchen diner so you can sleep in the living room. Or with a loft you can convert, or at least add boards so you or the 18 can sleep in. You can't just keep moving areas and schools and presumably apprentice opportunities.

I naively thought no debts and a 25k deposit would be okay

That’s not really how it works. They look at affordability if interest rates go up. I can’t recall by how much but it’s something like if they were seven percent could you still pay the mortgage or would you be repossessed. Interest rates are very low right now, but there is no guarantee they will stay that way. The affordability checks came in after the interest rates rose before and so many people lost their homes.

So that’s why when it’s five times salary, student debt and three or four dependents it starts to get really hairy for you if interest rates increased.

I agree with the others op I think we were told we would get 4 x our annual salaries so it might be pushing it.

I do feel for you I really do, it sounds awful paying rent for somewhere you are unhappy, could you look at cheaper houses? Somewhere you might need to do a bit of work when you can or share bedrooms etc.

We used an individual mortgage advisor and his help was invaluable, I think if you don't get this one it's good to speak to someone else.

Also I know you aren't basing the over time in the mortgage but please think carefully about over stretching yourself and thinking you can use overtime for day to day living. I hope you are never in the position but dp works for local authority and whilst he doesn't do overtime they have stopped it for a lot of the staff & dp has had to tell his team they will no longer be offered overtime which is causing a lot of them massive financial issues.

Stop. Using. Habito.

They are not the right broker for your circumstances

If you keep doing AIP applications, you’re potentially going to end up with so many soft searches on your credit file that no one will lend to you

I know but when you think about paying so much more rent than a mortgage?

I don't know. It was just a nice idea for a few days to think we wouldn't be renting forever. I just want to paint my little girls room or put a picture on the wall.

(As an aside the part of the LA Dh works for is sadly growing).

It's stressful op.

I'd look for somewhere cheaper if I were you.

Dh earns 55k (More if doing overtime) and we are borrowing 145k. We have one dependant. It leaves us (after all bills/mortgage/food/cat etc) with around 1400 a month.

I don't see how you will afford it?

@GappyValley I didn’t think soft searches affected credit score?