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Original poster

Mortgage advice needed! - big deposit, low income

67 replies

RainbowQueen36 · 30/07/2021 15:32

Does anyone have any advice on how to get a first mortgage with a large deposit but a low income?

We have a large deposit - partly inheritance and partly gifted from parents - but our mortgage broker has only been able to get us a mortgage of £95,000 from the bank as we are low income earners.

Firstly we live in Oxfordshire - one of the most expensive places to live in the UK! We have both lived here all our lives so have lots of family nearby and are reluctant to move too far away. Our deposit is £200k made up from inheritance and gifted amounts from both of our parents.

We are both 36 years old and first time buyers. My income is currently £22,000 but my partner is self-employed and has not shown any income in the last 2 years unfortunately. So the mortgage broker is basing the mortgage on my income only.

We could afford a property worth £295k but that does not buy you much in the area we live in. We would like to start a family soon so we would prefer to buy somewhere with some space (ie. not a pokey 1 bed flat) - and also so my partner can have a garage/workshop/garden space to continue growing his business.

Ideally, we would like to buy a property that is worth around £350k but this seems impossible despite our large deposit.

Does anyone have any advice or suggestions? Is this a pipe dream that we could get a bigger mortgage somehow? TIA

OP posts:
SwayingInTime · 30/07/2021 15:34

I would say your partner needs to get a job for 6 months or so to achieve the mortgage.

Orf1abc · 30/07/2021 15:40

Think about it from the other side, why would you lend someone seven times their verifiable income?

What has your partner been living off for the past two years?

MyAnacondaMight · 30/07/2021 15:43

If your partner also got a job paying £22k, for a while, then you could probably afford a c.£400k property.

jetty21 · 30/07/2021 15:43

Yeah he needs to have an income or you need to get a better paying job to borrow more. There is no magic wand to increase what a lender will let you borrow.

lastqueenofscotland · 30/07/2021 15:44

Your deposit is irrelevant. Your mortgage affordability will be based on a multiplier.

MrsMoastyToasty · 30/07/2021 15:45

Can you buy a property in a cheaper part of the UK and rent it out for a couple of years? At least it will get you on the property ladder. Sell up in a few years and then use the sale to fund a property that you will live in.

Ilovemycat13 · 30/07/2021 15:45

@Orf1abc

Think about it from the other side, why would you lend someone seven times their verifiable income?

What has your partner been living off for the past two years?

It’s not 7 times, it’s 4.

However @RainbowQueen36 nationwide did bring in 5.5x borrowing. This is how we got on the ladder and that was with a real measley deposit and no help. Worth a go??

Bells3032 · 30/07/2021 15:53

@Ilovemycat13 she wants a £150k mortgage on a £22k salary which is 6.8 times. She was offered 95k which is just over four times but she said it's not enough.

OP - as others have said there's no magic want. One of you is going to have to get an additional income or you are gonna have to move somewhere cheaper. even if they offered it to you if we were gonna be very generous and you managed to get a 1% interest rate over 40 years that would be £400 on a £1.5k take home pay (assuming you have no pension or anything). so £1.1k to pay everything else for two of you. realistically you are going to struggle and that's assuming you can get such a great mortgage

Ilovemycat13 · 30/07/2021 15:55

@Bells3032 ahh I see, my mistake Grin

Bobbybobbins · 30/07/2021 16:10

Your options are:

-Buy a smaller starter property and try to move up the ladder in 5 years or do
-Buy a bigger property in a less desirable area
-Your DO gets a job (if the business isn&5 making any money isn't this a necessity anyway?)
-You get a different job

It's great you have such a large deposit but from the banks' Pov your income is low hit such a high value property.

HmmmmmmInteresting · 30/07/2021 16:24

You can't afford what you want so you'll need to increase your income

Lorw · 30/07/2021 16:33

Your partner needs to get a job that will bring in an income. Really if the business hasn’t made any money in 2 years it’s not worth it. You need the security of two wages really when you have a mortgage, especially if you’re wanting to start a family OP. Also having a house means you have to pay for sudden repairs etc, all the financial pressure shouldn’t be on just one person.

It’s either that or buy somewhere smaller or further out the area, you have to compromise because you can’t afford it currently.

Good luck Smile

TakeYourFinalPosition · 30/07/2021 16:38

Fuck me, I’m self employed and love it; but two years of no money… that’s just not viable. Even with Covid.

You can either increase the deposit, knowing that your mortgage will be based on multiples of your income and therefore is stuck to around £95k, or you can increase your income… probably by getting DP to get a job and carry on his self employment in his free time until it generates money.

Or you buy somewhere for £295 and move later.

ginislife · 30/07/2021 16:39

Has he genuinely not earned anything ? I get the the s/e have had a shit time with Covid. Or just not declared it ? If it's the first then he needs to get a job, if it's the second then he needs to do what the rest of us do and declare his income and pay his tax.

careerchangeperhaps · 30/07/2021 16:43

If your partner has been self-employed for two years and hasn't got any income from it then I'm sorry to say he doesn't have a business, he has - at best - an expensive and time-consuming hobby (unless he's fiddled the books).
Time to get a proper job so you can buy the kind of house you want.

EvenRosesHaveThorns · 30/07/2021 16:52

Buy a solid investment 200k house. Live in it and wait for value to increase. Sell it for a profit once your partner has a proven income. It would be extremely hard if something happened to you (God forbid), an accident or a change of circumstances or company closing down, you do not want a super expensive mortgage hanging over your neck.

ItsDinah · 30/07/2021 16:54

Have a look at Shared Ownership. You sound like ideal candidates although I think your budget would only get you a one bed so your partner would need to rent a workshop. Try asking locally. Small traders might be happy to rent part of their yard at the moment . He'd need planning permission to run a business from any house you bought so the idea of running it from home may just be a pipe dream. Stagecoach,Oxford, are advertising for trainee bus drivers. Bus driving's a good string to the bow if you want to run your own business but also want regular income from employment for mortgage purposes or to provide a base income during business start up or slack periods.

OttilieKnackered · 30/07/2021 17:05

You earn less than one average wage between you, so it’s not surprising. You’ve been INCREDIBLY lucky to be handed £200k, time (for your partner) to step up and get even a basic job to contribute.

Sorry, but as someone who had to save up every penny I could myself to get a deposit on a one bed flat, and worked hard in jobs I hated to climb the ladder (modestly!) I don’t really have any sympathy here.

BlueSurfer · 30/07/2021 17:10

Your DP needs to find a paying job and it might be worth you considering a second job. You will also need to look at what you can afford long term. You might do better to consider buy to rent for an income, whilst renting a property that is the right size for your family.

HmmmmmmInteresting · 30/07/2021 17:49

This reply has been deleted

Message withdrawn at poster's request.

user1471528245 · 30/07/2021 18:01

You need to speak to a specialist broker who can deal with self employed or contractors, most high street lenders only look at multiples of earnings however a specialist broker will be able to look at continuous workload, this would be assuming your partner has had at least some continuous work or a consistent hourly/daily rate over a period of time, they won’t necessarily require books either

ivfgottwins · 30/07/2021 18:12

What's he been living off on the last 2 years then.....usually when I hear about this happening it's because the self employed person has chosen to largely be paid cash in hand and reap the benefits by not paying tax but without considering the effect it would have on things like mortgage applications?

If he hasn't earnt any income in the last 2 years then he needs to get a new job

Itsprobablynotcominghome · 30/07/2021 18:32

Firstly pay off any high interest bearing debt if you have any.

Invest the majority of the rest in super safe things. Maybe some in some less safe but potentially higher yielding stuff.

Max out your LISAs for 4K per year (pp).

Also your parents are clearly wealthy. I’d start a family now really, what’s the point of having all that cash if you aren’t living the lives you want? Get them to bail you out further.

We’re in a similar position, except we don’t want kids, well not our own, so have time on our side. (33). 150k deposit, 70k joint. income, Cambridge.

ivfgottwins · 30/07/2021 18:42

Get them to bail you out further.

I'm hoping that's a tongue in cheek comment?!

Itsprobablynotcominghome · 30/07/2021 18:46

@ivfgottwins

Get them to bail you out further.

I'm hoping that's a tongue in cheek comment?!

Nope?

If their parents loan them another £50-100k then they can buy what they want. Make some reasonable loan arrangement to pay them off over 5-10 years.

Everyone wins.