Single Parent Purchasing new home - Mortgage Issue

silence12

Hi I am a single parent, looking to move from Council housing to buy my own home.

I have a deposit of £30k.
And have savings for legal fees etc.
My credit report is as clean as can be.
Credit bills paid on time etc.

I have received a mortgage in principle from Abbey, however was declined at the Mortgage Application Stage due to my childcare fees being the same amount as the mortgage, so they see this as unaffordable.

However, when I have paid ALL my bills, I am still left with an excess income of over £400!pm

That hit me a bit, as there is nothing that I can do about the childcare fees.

I have now applied to Halifax for a mortgage in Principle, this was accepted, now I am waiting for a reply in relation to the Mortgage Application. I am praying that this goes through.

I am in receipt of tax credits and also child benefit. I get a monthly payment of £375 from his father and have a salary of £25k (£26 incl bonus).

I am at my wits end as I do not want to stay renting.

Is there anything I can do here?

Thrugelmir

How much is the mortgage you are applying for?

silence12

Thrugelmir wrote: »

How much is the mortgage you are applying for?

The mortgage I am applying for is £134,000

Senior_Paper_Monitor

Quick calculation ..... your income is approximately £30,500 (which both the lenders you have applied to will reduce to £27,250 or thereabouts - depends on the definition of bonus - as they only allow 50% of maintenance/bonus for the purpose of affordability).

£134,000 mortage on £27,250 = 4.9 times income - unlikely to happen with those lenders (and frankly probably not advisable with any).

There are lenders who may consider 100% of maintenance (and possibly bonus) depending upon its definition.

You don't mention benefits (child allowance/child tax benefits etc) and these may improve the situation. Oops missed that (just spotted it on review) - as I say, these will help with some lenders.

I guess you are fairly new to the mortage game - I have no doubt in stating that you would benefit from the advice and counselling of a good mortage broker. He/she may be able to get the loan you want by selecting the most suited lender BUT it may not be wise for you to stretch these limits.

PLEASE stop smashing in 'aplications in principle' on a lottery basis - you will screw your credit up doing this. Take proper advise. Be willing to drop your target mortage a little.

A final word of warning - maintenance should not be relied on unless it is properly protected (a very specialist issue that I have spent much of my last two months researching for my employer) - any change in your ex-partner's personal/financial/employment/health situation can result in a rapid variation (usually downwards) of their maintenance liability. Another reason not to push the limits.

Senior_Paper_Monitor

I've just seen your other thread - I repeat my entrity to get yourself a mortage broker !

silence12

Senior_Paper_Monitor wrote: »

I've just seen your other thread - I repeat my entrity to get yourself a mortage broker !

Thanks for this. I have a mortgage broker now. There have been two applications for a mortgage. The final one will be on Halifax and then I will draw out. I know that I will lose my legal fees, but I think that it will make my life easier now than to destroy my credit report.

silence12

Thanks for all the advice, I received a Actual Mortgage Offer today, as a result exchange and completion is set for next week!

silence12 wrote: »

Thanks for this. I have a mortgage broker now. There have been two applications for a mortgage. The final one will be on Halifax and then I will draw out. I know that I will lose my legal fees, but I think that it will make my life easier now than to destroy my credit report.