Getting mortgage

Blakey74_2

Our situation.

Joint income 52K. Annual bonus about 2K(which I understand does not get taken into account). DLA for one child 2K(guaranteed for 5 years). We also pay £243 each for childcare under the government scheme and this is taken from our wages before tax. We have 3 kids and pay childcare for 2. One is going to school next Sept and the other one will go to Nursery school in September so there will be no childcare from July. We have a loan with about 3k left which will be paid off before mortgage.

Mortgage broker advised us we could get up to 5x joint. We are though looking to borrow 200K with a 30% deposit. Mortgage has been referred and sellers are getting a bit uptight. Broker is trying to find out why. Its with the Coventry.

We have a good credit history with no problems. The broker did not previously ask about childcare and I'm wonder if this is now a problem.

Is a mortgage for the amount we are looking for likely with the Coventry?. The sellers EA wants us to to try their broker? Looking at Lenders website seems the amount we are looking for maybe a problem with many lenders when child care is taken into account.

tkitmike

Just want to point out, your Disability Living Allowance for your child is not Income or a wage and you can't take this into account when applying for a mortgage.

I'm guessing this is for the care component at the lower rate? - So not wanting to disappoint you, but with the Government cutbacks, please don't count this towards your income, it could very much be cut or the amount lowered.

Blakey74_2

tkitmike wrote: »

Just want to point out, your Disability Living Allowance for your child is not Income or a wage and you can't take this into account when applying for a mortgage.

I'm guessing this is for the care component at the lower rate? - So not wanting to disappoint you, but with the Government cutbacks, please don't count this towards your income, it could very much be cut or the amount lowered.

My understanding was lenders take into account between 50-100% of benefits. To be honest affordability is not really a problem. As I say childcare ends in July and wife only works 2 days a week. Also the industry I work always has a lot of overtime and this has never been stopped in the 15 years I have worked in it even over the last couple years

The issue really is more will lenders lend the amount we are looking for or how much would be likely be able to borrow.

I would assume we are less of a risk than a couple borrowing 4x joint fulltime wages of child bearing age.

Thrugelmir

Blakey74 wrote: »

I would assume we are less of a risk than a couple borrowing 4x joint fulltime wages of child bearing age.

On affordability grounds you are (potentially) far worse a risk than a couple who don't have chidren.

While "benefits" may be added to your income by a lender. Equally higher expenses to reflect the outgoings will be deducted.

In the current lending market and economic conditions I would be wary of a broker who makes statements such as this.

Mortgage broker advised us we could get up to 5x joint

A multiple of 3.5 times as a maximum is a far more realistic level of borrowing.

Blakey74_2

Thrugelmir wrote: »

On affordability grounds you are (potentially) far worse a risk than a couple who don't have chidren.

While "benefits" may be added to your income by a lender. Equally higher expenses to reflect the outgoings will be deducted.

In the current lending market and economic conditions I would be wary of a broker who makes statements such as this.



A multiple of 3.5 times as a maximum is a far more realistic level of borrowing.

I understand where you are coming from but was more looking from the point that a childless couple of say 30 borrow 4x joint then have kids and then all of a sudden it is 8x single 4x joint with fulltime childcare.

Our situation at just under 4x joint with one earner partime and childcare finishing in 9 months seems more reasonable.

The real issue is though is are the Coventry or any other lender highly likely to say no and the broker is just stringing us along or is there a chance in view of the LTV etc they or someone lese may say yes.

herbiesjp

With Coventry, to get the highest multiples, the main earner needs to be earning over £40k

They will then look at the whole scenario with your outgoings and benefits.

Hopefully your broker will have discussed the figures with Coventry before applying, in order to avoid wasting time and not meeting criteria.

Blakey74_2

herbiesjp wrote: »

With Coventry, to get the highest multiples, the main earner needs to be earning over £40k

They will then look at the whole scenario with your outgoings and benefits.

Hopefully your broker will have discussed the figures with Coventry before applying, in order to avoid wasting time and not meeting criteria.

Thanks alot. Looks like they did not which was my fear as they did not take too much interest in the childcare costs etc. Coventry came back and said they would only lend 185k.

We have now seen a whole of the market broker who says the amount should not be a problem. They went through all the details and advised which lenders would likely lend and which would not. Feel a bit more confident now.

PS Halifax have agreed the mortgage and survey is tomorrow. Thanks again