Will I ever get a mortgage?

Dr_Icognito

Just wondering if any MSE users are in the know really.

My wife and I would "like" to get a mortgage. But I can summarise our position in an ebay style ad.

We had a mortgage with northern rock and sold our house (luckily) when the housing market crashed and broke even (just about). Our current position is this:

The Bad
Credit cards - Just paid 1 egg off. But still have barclaycard (4k), Egg (2k), Mint (2k) to clear.
Overdrafts - Between us we have about 7.8k
Student Loans
Professional Studies Loans (Combined 45k)
Bills (the usual)
Childcare (2k a month)

Oh dear.

The SL / PSL / Bills / CCs and Childcare automatically come out of our account every month. Never missed a payment.

The Good

Our income from our main job is 80k (combined) this equates to about 4.5k a month. Our jobs are guaranteed in todays rough times.
We both also work extra shifts as a limited company and this can add up to an extra 8 - 10k a month depending on how much extra we do.

Problem is, if we go for a mortgage they only seem to focus on our main income and not our extra shifts this work.

Is there anyway to combine our total income together from main job and extra shift work to present a stronger case?

We are focusing over the next few months to clear the CC's and ODs completely and to save some kind of a deposit.

Any help or advice greatly appreciated.

Thrugelmir

Learn to budget! Understand where your money goes.

Tackle your most expensive debt first (interest rate) and go from there.

One you've removed the treadmill of debt. Saving for a deposit will be a lot easier.

uzubairu

You'd make a stronger case if you had less debt and a 20-25% deposit.

Clear your debts and save up a deposit that represents 20-25% of the cost of the type of house/mortgage you are considering.

Spend the next 12-18 months cleaning up your finances and take it from there.

SouthCoast

Post your Statement of Affairs on The Debt Free Wannabee Board for advice on budgeting.

Dr_Icognito

Sorry I am confused. I posted asking for advice regarding combining my "main" job and secondary job together as one total income for the purpose of a mortgage. Not (although thanks for the thought) on advice on budgeting. As I wrote in my initial post the CC's and Overdrafts I could clear in 2 months seeing as the wife and I earn nearly 15k a month combined income. Budgeting is not the issue.

Kavanne

Dr, the issue i think is that the mortgage lenders will ignore this income so people are focussing on how you can make your main income work as hard as possible for you

Your best bet would be to consult an independent mortgage advisor who can go through your documents with you and see if there's any lenders who will take your 2nd income into account. You'll then have a definitive answer from a professional and if the answer is 'no' I'd say focus on saving as much of your 2nd income as possible. From the figures you've given you could have a sizeable deposit in 6 months if you concentrate.

ILW

Am I missing somethig here. If you can get an extra 8k a month from your company, you could pay off all your debts and have about 30k left over in a year, or about 130k after two. With a mortgage of about 250k from your main income that should get someting pretty decent for a first buy.

Radiantsoul

It seems with an income of £15k per month you could almost buy a house out of saved income in a couple of years! I suspect that is why people suggest it is a matter of budgetting...

Thrugelmir

Dr_Icognito wrote: »

Sorry I am confused. I posted asking for advice regarding combining my "main" job and secondary job together as one total income for the purpose of a mortgage. Not (although thanks for the thought) on advice on budgeting. As I wrote in my initial post the CC's and Overdrafts I could clear in 2 months seeing as the wife and I earn nearly 15k a month combined income. Budgeting is not the issue.

What size mortgage are you aiming to obtain?

g_attrill

Practical advice: I believe that lenders will look at incomes from a company averaged over three years, I think what is normal is an accountant's statatement saying that you have had £x income in salary and dividends. Before "the crunch" a self-cert mortgage would have been the way, but there are few (or no) lenders offering those now. If (as it seems) you haven't been working for three years yet then this might not be possible - a good mortgage broker (London & County?) might be able to suggest what to do to make it happen.

Regardless, you will need a large deposit saved up, so minimise all outgoings for a while and it shouldn't be much of a problem, although if you are looking within London it won't be quite as easy as others suggest!

opinions4u

Dr_Icognito wrote: »

Sorry I am confused. I posted asking for advice regarding combining my "main" job and secondary job together as one total income for the purpose of a mortgage. Not (although thanks for the thought) on advice on budgeting.

You do look exceptionally "debt heavy" and that would, potentially, scare mortgage lenders who are being a tad more cautious than they used to be. That said, your debts are not dramatically unusual for recently qualified professionals in a number of higher paying industries.

As I wrote in my initial post the CC's and Overdrafts I could clear in 2 months seeing as the wife and I earn nearly 15k a month combined income. Budgeting is not the issue.

Clear them. It will help.

Lenders can and should use income from a limited company alongside your main income. They key will be the "net profit" of the company, not the money that you draw from it.

Additionally, most lenders will want 2-3 years of accounts proving the sustainability of the income. In the past - over a decade ago now, as an underwriter, I was able to use a great deal of discretion on this requirement for only one profession - medical doctors. I would, however, be a little concerned about lending against 50 hours overtime a month for a junior doctor at the local infirmary who is already working 170 hours a week!

I am assuming you are a medical doctor. The BMA (linky) and other professional bodies have their own brokerage service. I would expect them to be able to place your case with a mainstream lender at a decent rate with a reasonable chance of using the profits from the limited company as part of your overall income.

If not, I'd talk to others in your profession with similar circumstances and find out who organised their finance for them. Don't go directly to a lender in these circumstances. Your needs are a little more specialist than a branch based mortgage adviser is usally skilled to deal with.

Good luck.