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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:

BeaBeaBuzz · 30/07/2021 18:49

If it’s you earning all the money how on earth would you pay this mortgage on maternity pay? Or alongside childcare? Pleased to see lenders being responsible tbh

Neverrains · 30/07/2021 18:52

You really can’t expect to borrow £150k on a £22k income, that would be madness on behalf of the mortgage provider.
Where are you living currently? Together you live off one below average salary which must be quite tough.
Your DH needs to get a job.

Iseeyoulookingatme · 30/07/2021 18:53

Your dp needs to find a job. If anything we're to happen to you and you couldn't work then he wouldn't be able to help cover the mortgage. Also how will he contribute to the mortgage if he isn't earning a wage?
I know it's probably not what he wants to hear but if you are planning on having kids in the future then he will need to provide especially when you go on maternity leave.

SpaceRaiders · 30/07/2021 18:53

I think you’re being somewhat naive. Either move 10 miles out, to get the house you want or adjust your expectations accordingly.

I can’t believe your dp hasn’t made a single penny in two years as SE. If that’s genuinely the case, he needs to go out and get a job, delivering parcels, bar work, whatever he need to increase your joint income.

GorgeousLadyofWrestling · 30/07/2021 19:39

You buy the property you can afford. Isn’t that everyone has to do? Seeing this a lot on a few threads lately.

I’d love to buy a four bed semi so that my three children have a room each. Unfortunately all we could afford right now was a two bed flat 🤷🏻‍♀️ Fortunately they’re young enough to share and hopefully the flat will increase in value/ we’ll build up enough equity to buy a three bed house.

Buy the property you can afford, or increase your income. You’re incredibly lucky to have £200k.

Cocomade · 30/07/2021 19:46

Buy a property you can afford
DP gets a new job

Only two options really.

You can move up the ladder in afew years time.

If you have to move a little bit out of your desired area for now you may need too.

Our first place wasn't where we wanted to be but it's all we could afford and were desperate to get onto the property ladder. 4 years later we are where we originally wanted to be with a bigger house.

Brown76 · 30/07/2021 19:52

You buy a 1 bedroom flat, that has space for a double bed and a cot, and all sleep in the same room. My 4-year old has only just moved up to a single bed sized bed and this is totally doable. Then look to get a 2 bed place in 5 years. But…how are you going to afford childcare? Will your partner be the stay at home parent, or would they be earning by then?

Brown76 · 30/07/2021 19:55

Also would your partner be likely to make profits in this tax year? If so you could wait until next April after they’ve done a tax return - some brokers might be able to borrow against 1-years records. Or could they get a part time job to bring in some income?

Andthenanothercupoftea · 30/07/2021 20:00

Buy smaller or in a slightly less desirable area, like lots of other people who can't afford what they would ideally like. I live in Oxfordshire and £295k will easily buy you a decent house in lots of areas (Banbury, Bicester, Kidlington, Witney etc etc).

HeddaGarbled · 30/07/2021 20:07

And he wants a workshop!

spotcheck · 30/07/2021 20:14

Look at properties without garage/ workshop. If it is needed for your husband's business, he should rent the space, and pay for it from the business.

spotcheck · 30/07/2021 20:17

But... looking at Rightmove, there are loads of properties... ?

Neverrains · 30/07/2021 20:21

Yeah, just had a look on Rightmove too and there are quite a few 3 beds in Oxfordshire in your budget. Most need some cosmetic work but you can do that gradually.

Ohpulltheotherone · 30/07/2021 20:29

OP has disappeared so I wonder if reality has kicked in after seeing the comments but hell, just for the sake of it.

You can’t afford a 150k mortgage on your salary.
You can’t afford to start a family on your wage, take maternity leave and still pay the mortgage.

If your DHs business hasn’t allowed him to draw a wage for two years then it’s questionable as a viable business to be honest - it does take time to build a business of course and you don’t always see a profit for a few years but he should be able to pay himself even just a modest wage…

He needs an income, even lenders who are happy to lend to self employed will require 3 years worth of accounts to prove take home pay - so even if he continues with his business, until he’s turned a profit for himself for 3 years on the trot he’s not going to be able to use that on an application.

So your options are
Move somewhere where you only require a very small mortgage which is easily affordable if you do go on maternity leave.

DH gets a job

You get a better paid job

Cocomade · 30/07/2021 20:32

Yep just looked on rightmove and this is a very decent first house;

www.rightmove.co.uk/properties/72407004#/?channel=RES_BUY

NoSquirrels · 30/07/2021 20:34

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.

So really to solve this it’s whether a) the business is not viable therefore get a job or b) the business is viable but the accounts (tax return) don’t show this so time to bite the billet and show a profit so you have decent self-employed accounts to prove his earnings. (Probably also get a job alongside unless he wants to wait 2+ years…)

ShellieEllie · 30/07/2021 21:33

What part of Oxfordshire are you looking at? You could easily get a 3 bedrooomed home in some areas there for under £250k.

FurierTransform · 30/07/2021 22:38

I don't think there is anyway round this - have to either earn more or compromise on location/size.

jellybe · 30/07/2021 22:52

There are plenty of parts of Oxfordshire that you can buy a decent three bed house for the money you have. Obviously, not centre of Oxford but Oxfordshire.

Or you need to have a serious talk with your DP about his business and if it is actually viable.

£200k deposit is great for you but the leader won't care it's all to do with how much you can actually afford to pay.

HmmmmmmInteresting · 30/07/2021 23:03

There are plenty of parts of Oxfordshire that you can buy a decent three bed house for the money you have. Obviously, not centre of Oxford but Oxfordshire.

Are you sure about this? I just had a look on RM and all I could see were 1 bed apartments and ex-council
houses being sold at auction with tenants in situ

Original poster

RainbowQueen36 · 31/07/2021 01:07

Thank you all for your comments and suggestions. I clearly have a lot to learn and think about especially as a newbie to the world of mortgages.

Unfortunately our parents are not wealthy. My parents have offered to give us money that they inherited from my grand-parents quite recently. My partners parents have decided that they will do equity release so they can help us.

My partner was made redundant at the end of 2018 and struggled to find work. He is dyslexic and has little formal qualifications despite being great at mechanical and practical things. In early 2019, after a lot of failed job applications he decided to try working for himself. Things were starting to look up and by the end of 2019 he was subletting workshop space from another company. The business was doing great and looked to be successful.

Then the pandemic started and when lockdown hit in March 2020 he was shut out and eventually lost this space he had been using. He managed to get a temporary part-time job by the middle of 2020 but only paying enough to cover day to day expenses. However, he lost this job in March 2021 as the company could not afford to keep him on.

He has only recently found a new workshop space that he could afford and is trying to restart the business again. He has also been looking for other work, full or part time but has not been successful yet.

Sorry for the long post. I didn’t put all this info in my original post as I didn’t want it to be too long winded! In hindsight perhaps I should have provided more context.

I think what a lot of you are saying is right and we should look to move away from the area. I’m scared to move away from the support of our families and the area I grew up in but it looks like that is our only option.

Thanks again.

OP posts:

LemonSwan · 31/07/2021 01:16

I would move to a cheaper area. You have more than enough deposit to buy a decent 3 bed semi with workshop in numerous areas in the country (midlands or north) mortgage free.

Your partners business will not help you here. We have a successful Ltd company turned healthy profit and paid two salaries for two years and the banks will hardly lend us anything. Its not looking good for self employed right now.

Being mortgage free will give you freedom to have a family and start the business. Thats never going to happen with a mortgage if he has little qualifications and you are relying on his wage to meet ends.

EarringsandLipstick · 31/07/2021 01:26

They must be stark staring mad.

Especially your DP parents.

I get that they want to help you. But are they securing their own futures? Your parents are using an inheritance and DP's are doing equity release.

I appreciate things have been tough & that they want to help. But even with a deposit of such magnitude £22k is a very low salary for two people in terms of running a house, potentially having a baby ...

The first priority is not a house but trying to process DP's career. He cannot continue to be self-employed with no income.

I'd also really double-check this size gift is feasible without long term consequences for your parents. (Both sets).

Nat6999 · 31/07/2021 02:01

Look for an ex council house, generally cheaper than non council houses & a lot more room for your money.

Andthenanothercupoftea · 31/07/2021 06:35

When you say you'll have to move away from the area, where are you located at the moment? I've just bought a house in Oxfordshire and there were plenty around the £250-£300k mark (although we ended up a bit high because we were fussy about location). This included properties with outbuildings.

North Oxfordshire with an outbuilding, in a village £290k: www.rightmove.co.uk/properties/103654196#/?channel=RES_BUY

Semi detached bungalow, space for a workshop in the garden: www.rightmove.co.uk/properties/106044407#/?channel=RES_BUY

Not too far from Oxford, enough space for an outbuilding in the garden and under budget enough to buy one www.rightmove.co.uk/properties/111218987#/?channel=RES_BUY

If you're in the centre of Oxford or a nice village, yes you'll have to move to afford somewhere, but not a million miles away.

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