Add wife's contribution to household as "income" on mortgage application

Fjords

After reading your comments, with regards to inflating my income, I do agree with you. Your points are very valid. It won't work and I am not going to do it.

What you can't afford is a £200k house. So either wait until you have a proper deposit and debt repaid, or lower your sights a little.

However, I do disagree with you when you are saying that we can't afford a mortgage of £200k. You don't have the detailed knowledge of our finances. A £200k mortage (25k deposit) would be around £850 per month. This is MORE than affordable to us even with the level of debts I have and actually more than the average rent is around our area. Next year, one of my loans will be fully repaid at which point monthly outgoings to loans will be halved. The year after everything will be fully paid off (my wife will still have her DMP). Even if the interest level went through the roof and the monthly mortgage repayment was £1500 per month we could still afford it although it would be tough. We both have very good stable jobs with a combined monthly net income of £3800 of which £241 from my wife covers the DMP and for me I have a minimum repayment of £700 per month although I overpay every month to enable a quicker repayment.

I know most of you guys won't believe me, but I have done the maths and figures so many times now and I have no hesitation on what we can comfortably afford. Otherwise I would not be thinking of a mortgage.

The problem is that banks won't lend us the money mainly due to my other halfs previous history... Hence why we will probably go with a 50/50 split with my parents in law and then buy him out later....

I understand where you are coming from and especially on a board like this where it's the norm to argue against any posters opinions and ideas no matter how profound they might be. I say norm...that means it doesnt always happen. And I'm not aiming this at anyone in particular since I am like that myself on on forums!

There's my rant over. I'm a happy bunny now ;)

Hippychick

I'd love to see what 200k mortgage has a monthly payment of £850.00, I am assuming thats interest only. If it is then you may as well rent unless you can put additional money aside to repay the capital.

At the moment the chances of obtaining a mortgage with £700pcm debt repayments should be zero.

Fjords

Hippychick wrote: »

I'd love to see what 200k mortgage has a monthly payment of £850.00, I am assuming thats interest only. If it is then you may as well rent unless you can put additional money aside to repay the capital.

At the moment the chances of obtaining a mortgage with £700pcm debt repayments should be zero.

Thats for a 200k mortgage with £25k of that being the deposit. If we go repayment (which we may do) it's around £1000-£1100.

And your missing the point about why we want to buy. If you read the post from beginning to end you would have read that we would like the security of owning our house.

Then we can settle down and not run the risk of being kicked out every time the landlord want to either sell the house or rent it out to their relatives/friends. This has happened to us twice in the last 3 years.... It's stressfull to move house. We are now living with my parents in law until we buy a house. Which we will do.... The point of this thread wasn't about IF we should get a mortgage, but HOW to go about getting it.

Perhaps this is not the right time to get the best price as prices may go further down, but we are in this for the long term now.

It will never be a right time for certain things so we are going to jump in and start settling down amd enjoying life instead of running around like headless chickens for the rest of our lives because people say "you need to wait because it will be better/faster/cheaper/ and so on and so on"..... Sorry, but I want a proper life in a proper home....even IF that means I loose out a bit in the short run because prices go down.

Alternatively, fix the uk private renting system so that we can get long term rents like they have in europe. There, landlords can't kick people out willy nilly like they do here. Contracts are usually 5-10 years with NO break clause..... Here in the UK the system is geared towards maximum protection for the landlords...and ZILCH (almost) for the tenant.

Emmzi

run me the figuires if base rate is 6%, 10% and 12%.

Can you still afford it then *and* afford to have a social life?

Emmzi

Fjords wrote: »

I understand where you are coming from and especially on a board like this where it's the norm to argue against any posters opinions and ideas no matter how profound they might be. I say norm...that means it doesnt always happen. And I'm not aiming this at anyone in particular since I am like that myself on on forums!

There's my rant over. I'm a happy bunny now ;)

If one person calls you a horse, ignore him.

If two people call you a horse, have a look in the mirror.

If three people call you a horse, go out and buy a saddle.

I am sure people urge caution because they have seen it, been it, done it, got the reposession order.. Not because they don't want you to be happy.

Hippychick

Well I have just run your calculations through moneysupermarket to obtain a rough idea of what products you could get based on 25k deposit 200k purchase price your salary of 2300pcm and 700pcm debt repayments.

Result absolutely zilch, so again who do you think is going to lend you any money at the moment? even with a 25k deposit that is not 75%LTV which is what the majority of lenders require at the moment. You want to know how to go about it, at the moment I and almost everyone else who has replied to your post don't think you can.

If you are living at your parents in law then I doubt they will kick you out, use this time to clear your debts and actually save yourself a bigger deposit. House prices are still going to fall, if you clear your debts asap then you will be in so much of a better position to buy.

Fjords

On a £200k (25k of that being deposit) mortgage the repayment for 12% would be around £1800.

If we get a mortgage today it would be a fixed rate deal for x years. As mentioned I am debt free in June 2011 at which point we COULD afford £1800 per month.

You could even go further and say if interest rate was 24% or what about 48% would I be able to afford it then? No I wouldn't and neither would people who had no debt at all.

This is excactly my point. According to people on this board there will never be a right time to buy and people are always told to wait by creating some scenario of events that probably won't happen (i said probably...)

Let me twist things a bit. Imagine I asked you the following:

I have an income of £40k with no debt whatsoever. Also I have a deposit of £50k.(which is double what I had in mind in my post above, but our father in law would probably lend us that as if we need it) Would I be able to get a mortgage for £200k in todays climate? According to most banks websites I have visited a £200k mortgage would be feasible.

Based on your scenario of a 12% or possibly higher interest rate that person might also struggle to repay their mortgage. What advise would you give them? To hang on until they can buy the house outright?

Hippychick

But you still won't get a mortgage with £700pcm debt repayments, you seem to be missing that bit.

Fjords

Hippychick wrote: »

Well I have just run your calculations through moneysupermarket to obtain a rough idea of what products you could get based on 25k deposit 200k purchase price your salary of 2300pcm and 700pcm debt repayments.

Result absolutely zilch, so again who do you think is going to lend you any money at the moment? even with a 25k deposit that is not 75%LTV .

You're absolutely right. However, adjust that to £50k and the result will be different. And if you read my post here (and the other one which Emmiz pointed towards were I talked about joint share with parents in law) we are able to get the £50k from them provided they get a share of the house. I did say £25k here but as you pointed out that might not be feasible...hence I might have to up that a bit. We are being supported by our parents in law on this house purchase.

Hippychick wrote: »

If you are living at your parents in law then I doubt they will kick you out, use this time to clear your debts and actually save yourself a bigger deposit. House prices are still going to fall, if you clear your debts asap then you will be in so much of a better position to buy.

That is not the point!! Please read my post where I said we would like to start living a life and not keep waiting forever because there's always something "better" to wait for. I've waited so long now the cows are now in my bedroom...let alone come home!!

Emmzi

Fjords,

you seem determined to do it your own way. I wish you luck. I am sure people will be interested to know who will lend to someone in your position so folks may appreciate an update once you have it all signed and sealed.

Have a look at Martin's article on mortgage brokers. Maybe you can find someone to help from that route.