mortgage/seperation - any advise

LJ1

marriage break up - equity in house - just at the negeoation stage re split of assets - kind of stuck at the moment but thats a legal matter.

i am 47 years old - i have 10 year old daughter
work part time - receive tax credits and maintance from husband.
at the moment cant get full time hours back - might get more hours in the future but need to do this bit by bit - also have care of elderly mother which restricts me a bit.
council housing lists are very long - and very unlikley we will get council house when family home eventualy sells - id prefer not to waste the money i get from the sale on expensive private letting - would really like to try to buy something as security for my daughters future.
my part time income is only around 11k per year - i dont think many lenders take into account tax credits and maintance and i am not convinced these are secure forms of income.
in a ideal world id like to be able to buy smaller home outright but i realise i might have to take on board a small mortgage - but looking at things long term i believe this would be cheaper than renting a property.
however i dont want to overcommit myself.
Do you think id be able to get a mortgage based on the fact my income is
so low -
i was thinking 10000 -13000 over 13 years - do you think this is acheviable based on my leval of income age etc.

we have equity of around 160k in family home at the moment -
im trying to get 60/40 split husband wants 50/50 but thats a matter for the lawyers -

long shot i know - does anyone think i should try and get proposal of a mortgage so that i can say well if this is agreed then i can guarentee we will be able to have a home.

im just trying to think of all the situations we could find ourselves in and cover all bases - do not want to see hard earned money going down the private letting drain - if i can salvage some security for my daughter for the future out of a bad situation then i will be happy - but want to keep things realistic and practical for the time being at least - things could change in a few years i know -

opinions4u

You can certainly raise a mortgage on a low income, especially if you are going to be putting in a significant deposits (e.g. £70k-£80k).

Somebody else posted on these boards today that they had raised an £80k mortgage from the Halifax on an income of £17k+tax credits.

Cazza

Generally, of those lenders who will take benefits, WTC will be taken into account but not CTC. On your income of £11,000 and assuming no other debts a mortgage of the amount you mentioned sounds very reasonable. I think the more important thing for you to look into is the monthly repayments. You need to make certain you will be happy with these, as I suspect that even now, many lenders will be prepared to give you far more than you would be happy borrowing!

LJ1

council rent would be about 250-300 per month - i think ??
what i was thinking was i would have that to pay anyway doubt i would get a rebate. my thinking was
i already pay out building/contents/life insurance
if i could have a mortgage of up to 150 per month and put aside 100 for maintance of house then i would be paying the same as i would for rent.

i dont want to overcommit myself -
what ever the split of the equity i get i consider it to be quite a bit of money
am i right in thinking id be better investing it in property rather than paying out a rent every month -

Cazza

You need to live somewhere, and you have worked out that the payments wil be very similar whichever road you go down. There are many people who don't believe in property ownership and they have very good reasons. I'm not one of them, personally! In the long term, you will pay off the mortgage and eventually have somewhere to live where you don't have to pay out each month. That won't happen with renting.

Other things you may want to look into (and I have no idea with this as it's really not something I know anything about!) is how long the waiting list is for council accomodation in your area, what it's like and whether you want to live there in terms of getting to schools / work etc. Also, will the fact you have a large lump sum in the bank make any difference to you eligibility?

opinions4u

LJ1 wrote: »

council rent would be about 250-300 per month - i think ??

One option is to rent. Invest your £80k via an IFA in to an appropriate investment bond and use the drawings (£333 pm) from that to pay your rent for you.

Saves on buildings insurance and property maintenance costs. Misses out on the recovery in the property market (as and when it happens).

what i was thinking was i would have that to pay anyway doubt i would get a rebate. my thinking was
i already pay out building/contents/life insurance
if i could have a mortgage of up to 150 per month and put aside 100 for maintance of house then i would be paying the same as i would for rent.

But you'd have spent your £80k.

i dont want to overcommit myself -
what ever the split of the equity i get i consider it to be quite a bit of money
am i right in thinking id be better investing it in property rather than paying out a rent every month -

In the longer term, property has done well as as investmentt. But this is about your home and what's right for you now rather than an investment strategy.

You may wish to rent for a few months while you genuinely consider what you think is the best long term decision for you.

I've always owned. But it doesn't mean it's best for all circumstances.

Valli

I got a mortgage to stay here and I think it would definitely be worth getting a provisional offer (ie without actually having the house valued etc) just based on your income because then YOU'LL know what options are open to you.
So you can properly weigh up your options.

LJ1

Invest your £80k via an IFA in to an appropriate investment bond and use the drawings (£333 pm) from that to pay your rent for you.

Unfortunatly this would be no good - as the more money i have in the bank the less tax credits id get - so whilst it would be nice to have funds which paid the rent for me - id loose out in tax credits.

i know - from the calculators etc what sort of mortgage id be ablet to get based on my income, however taking that to the limit just stretches me and too big a risk i think. Im going to stick with working out a amount i can afford each month and then working that back to the amount of mortgage i can afford rather than what i might get.

80k is a lot of money - i have to use it the best possiable way i can to allow some security for my daughter -

thanks to all who have replied. i appreciate any advise on offer - sometimes other people think/suggest things i had not thought of -
it helps a lot.

Valli

Youi don't say where you are in the country or tell us what average house prices are...round here that would be almost enough to buy outright...

LJ1

im in scotland - could get 2 bed house for around 110k
i think id be realistic in saying (taking my outgoings into account) i could manage
a mortgage of between 10-13k

Cazza

LJ1 wrote: »

Im going to stick with working out a amount i can afford each month and then working that back to the amount of mortgage i can afford rather than what i might get.

Given your situation, I definitely feel that if you do go down the mortgage route, that is the right approach to take, and it sounds as though you will get a suitable property for the amount you have to spend too.

One thing to bear in mind when you do start to look around, many mortgage companies have a minimum lending limit of £15,000 (one or two take this uo to £25,000). If you decide to have a look on some websites and you don't get many options coming back with a mortgage of £10-13,000, that could be why. Another reason why it is worth going to see an independent adviser, as they may be able to tell you how to work around this and still keep your options open. Good luck!