Advice please: Inherited some money but not enough income to qualify for a mortgage

MJB220

I ma looking for some advice for a friend, she has inherited some money but does not earn enough to qualify for a mortgage for the remainder of the price of a suitable house. I believe that also she will lose her housing benefits as a result of the inherited money so her income will be reduced to that of a part time teaching assitant. Does anyone know of ways she could use the money to get onto the property ladder?

chewmylegoff

MJB220 wrote: »

I ma looking for some advice for a friend, she has inherited some money but does not earn enough to qualify for a mortgage for the remainder of the price of a suitable house. I believe that also she will lose her housing benefits as a result of the inherited money so her income will be reduced to that of a part time teaching assitant. Does anyone know of ways she could use the money to get onto the property ladder?

buy a cheaper house - one that she can afford.

MJB220

Unfortunately it is not that simple, the inheritance is enough for a substantial deposit but not enough to make a mortgage in reach given the income level.

Diddlydee

Perhaps shared ownership ???

Could she approach one of the housing associations in the area to buy, say, 25% and rent the balance???

Worth a go perhaps

Jowo_2

There's no great short-cut to home ownership other than shared ownership schemes. The Directgov website has a link to the affordable/ low cost home ownership schemes. In either case, the applicant has to be able to demonstrate that they can afford the repayments.

Single people in part-time low paid employment are quite unlikely to become home owners.

What you are basically saying is that she has a deposit and no more! Therefore, if she is not suited to a shared ownership type of scheme, she will need to earn more in order to get a mortgage from a conventional lender. Can she find full time year round employment?

She should also understand that home owners don't get housing benefit - there are schemes available to pay interest for some homeowners to stop their properties being repossessed when their income drops but tax payers don't pick up the tab for homeownership in those circumstances.

And yes, capital, including additional savings from an inheritance, does affect all means tested benefits as people are supposed to use it for their living costs. The bods on the separate benefit forums will be able to advise, otherwise she can put her details into the Entitled to (turn to us) website.

MrsManda

Has she worked out what mortgage she'd be able to afford on her salary and added the inheritance to that as a deposit? That'll give her how much she has to spend on a house if that's what she decides to do with it.

Depending on her circumstances it may be worth looking at a shared ownership scheme.

00ec25

why does she want to own a property?
if she cannot afford a mortgage then can she afford the costs associated with owning a property?

or could it be that she believes the best "investment" for her lump sum is to sink it all into property? She should consider other investment options not just blindly follow the dictat that she must own property otherwise she is somehow an incomplete person

PasturesNew

Her best bet is to bank the money and spend the next 3 years improving her income/job and saving as much as she can, then get a mortgage in 3 years' time.