Need a BIG mortgage!

jyonda

My girlfriend and I are FTB's trying to buy a 250,000 3 bed house (this is actually cheap where we live can you believe?!) for us and our 2 year old daughter, plus we have another child due in the summer. I work full time with an annual income of 35000 plus 6000 in overtime and my girlfriend earns approx 18000 working freelance part time but she has only earnt this for 6 months as she was previously looking after our daughter. We have a 25000 deposit borrowed from family and no outstanding loans.

The problem we have is that the highest mortgage I can get on my salary alone is with A&L at about 185000 but they won't take her salary into account as she is freelance. I looked at self cert mortgages on the web with B&B but it seems they lend lower multiples of income than A&L so would be pointless going for one unless she lied through her teeth.
Does anyone know how to get around this without moving to a cheaper area?

Feel free to be as financially creative as you like ie, auctions, bridging loans ANYTHING!
:beer: Cheers!

herbiesjp

Not too sure which self cert lenders you have been looking at to include your girlfriends income however there should be a couple that could come close to the figures needed.

Having said that, there may indeeed be ways of getting "normal" rates agreed for you - but it all depends on your circumstances.

AndrewSmith

I agree with Herbiesjp.

I would think that once your partner's income has been included (self cert etc), what you are looking at should be achievable.

Not easy to say for sure though without knowing all the facts.

Hope this helps

Andy

jyonda

UCBhomeloans.co.uk will only lend 162000 using their online calculator. They are linked with Nationwide. The Bradford and Bingley web site did not have any mortgages which matched our criteria.

I'm very interested to know who else to go to and what the other options are to get a normal mortgage? What would be the ideal circumstances apart from a long, perfect credit record, no outstanding loans, three years+ on the elctoral register and a 10% deposit?

The important thing for us is to not waste time talking to every lender under the sun as it's incredibly difficult to arrange childcare around work times. It's difficult enough finding a house in our price range.

Thanks for the reply

Jyonda

stanmoresaver

jyonda wrote:

My girlfriend and I are FTB's trying to buy a 250,000 3 bed house (this is actually cheap where we live can you believe?!) for us and our 2 year old daughter, plus we have another child due in the summer. I work full time with an annual income of 35000 plus 6000 in overtime and my girlfriend earns approx 18000 working freelance part time but she has only earnt this for 6 months as she was previously looking after our daughter. We have a 25000 deposit borrowed from family and no outstanding loans.

The problem we have is that the highest mortgage I can get on my salary alone is with A&L at about 185000 but they won't take her salary into account as she is freelance. I looked at self cert mortgages on the web with B&B but it seems they lend lower multiples of income than A&L so would be pointless going for one unless she lied through her teeth.
Does anyone know how to get around this without moving to a cheaper area?

Feel free to be as financially creative as you like ie, auctions, bridging loans ANYTHING!
:beer: Cheers!

Do you have money for the associated costs- legal, stamp. survey etc. if so then you are looking for a 90% self cert loan. There are a few lenders now who do this.

£250000
- £25000 Deposit

---

£225000 loan

Using half of your O/T means that you have a joint income of £56000 so are looking at over 4x joint income or 5.44x yours and 1x hers (which may not continue due to other commitments). There are not many lenders who will do this.

Nevertheless, given your situation, if you feel that buying this property is the correct thing to do (rather than buy in a cheaper area and move again later, duplicating costs etc)- consult a decent broker as there may well be a way to package this to achieve a mortgage offer- but, you need professional advice, rather than trying to DIY.

Hope this helps

SS

TheTraveller_3

Sorry if I'm being negative and pointing out the obvious but I'm guessing that a £230,000 mortgage is going to cost you anywhere between £1250 to £1350 on a 25 year repayment mortgage. Add to this things like building & contents insurance some life cover, council tax, food etc... and it can become frightening!!!

Make sure you do a careful budget planner. Do you see this has being affordable long term? Will your girlfriend still be earning £18000 after the new baby arrives? Are you confident your overtime will not dry up? Is childcare an issue? 2 children in nursery 3 days a week can cost £800+ monthly.

With property prices not expected to rise significantly over the next few years would it be better to wait until your youngest is in pre-school or look at a lower purchase price.

Just throwing my thoughts in the air, hope you don't mind.

Good luck what ever you decide.

jyonda

I don't think you are being negative at all, these are pertinent questions. A mortgage of 225000 over 40 years should be 1100 or so, an amount which we could easily spend on rent each month for the same thing. Yes there would be associated costs although contents insurance, council taxand life cover are expenses we already have. Plus, mortgages go down, rent goes up.
40 years is a long time but with overpayments from girlfriends freelance earnings we could get the capital down and remortgage. I work shifts which means I can look after the children for at least one day a week and my girlfriend can work from home at times to suit though her her earnings are likely to drop to 10000. My overtime won't dry up.
House prices have risen by 3% last year despite it being a buyers market and in any case our motivation is to get into our family home. We don't want it to be a financial disaster but while employment is high there shouldn't be one.

Thanks

Jyonda

stanmoresaver

One option, (and this is a recommendation to discuss with your professional mortgage adviser, not advice!) could be to look at an interest only mortgage initally with a structured repayment vehicle- (probably a cash isa) running along side it so that you can remortgage in a few years.

It's a contencious stratagy, and i expect a few of the regular brokers on here to probably raise an eyebrow or three, but if you are prudent and disciplined, it could accomadate your situation without giving you committed monthly payments that at times may be very difficult to manage.

Anyway- as i said, make it an item on your agenda for the meeting with your adviser..

jyonda

Hi Stan, is this because lenders will lend more with interest only mortgages? Or is it strictly to accomodate affordability until my girlfriend is back earning? How much would we need to pay into the cash isa and would we need to demonstrate to the lender that we were paying into it at all?

I will in no way hold you to any answer and I will speak to an advisor but I would genuinely like to know what is likely to be said before I go in there.
Preparation is the key to saving time I feel.

Thankyou for your time!

stanmoresaver

jyonda wrote:

Hi Stan, 1/is this because lenders will lend more with interest only mortgages? 2/Or is it strictly to accomodate affordability until my girlfriend is back earning? 3/How much would we need to pay into the cash isa and 4/would we need to demonstrate to the lender that we were paying into it at all!

1/ no
2/yes
3/ needs to be discussed with the adviser.
4/ probably not.

Hope this helps

SS