1st time buyers complicated financial situation looking for some initial advice

Yorkielass

My husband and I (we got married this summer) are both 23 (nearly 24).

Between us we have about a £50,000 deposit (OH has inherited some money and we've both been saving) however:

OH is doing a PHD (just started his second year) he gets a grant and extra funding which means he gets about £16000 tax free a year.

I currently work on short term contracts (have been for nearly a year now (just starting a new one until the end of March) and earn (or would earn if permenant) £13800 a year. I'm also currently looking for a 'proper graduate' job but it's hard in this area, and we're tied here due to OH's PHD.

Anyway we're currently paying about £600 a month combined on rent and would love to buy - especially considering the deposit we have. In laws are very keen for us to buy too and were asking when we saw them at the weekend what we could do. They've offered to act as guarantors if needbe, and I know my parents would do the same - and they have the possible advantage of not having any mortgages on their house.

Anyway to summarise:
1. How do mortgage lenders view PHD grants?
2. How does my work on consistent short term contracts affect things?
3. What could our parents do to help?

I know we really need to find an independent financial adviser to talk to, but thought someone on here might be able to give us some advise.

Thanks

MortgageMamma

I have limited experience in obtaining mortgages with grant funding but I have managed it once for a client of mine. The consistent short term contracts really depends upon the nature of your work.

You are right in that your parents could guarantor the mortgage, but most lenders are only willing to do this for professioanls at the beginning of their careers on a pre defined career path - e.g. doctors/solicitors/teachers

Hope this helps a little, but its too complex a situation to discuss fully on here.

Before you look at properties take professioanl advice, preferably from a whole of market mortgage adviser, not an IFA, and get them to confirm your maximum borrowing amount

Kind regards

MM

Yorkielass

Thanks very much for your reply. The annoying thing is if I was working in any of those professions I'd be earning enough to get the mortgage I need without needing a guarantor.

Will try and find a a whole of market mortgage adviser to talk to asap.

never_enough

I have personal experience in this area, although it may be a little out of date.
My parents guaranteed my first property before I had even started university, never mind got into my career. I wasn't even working full time at that point, but did have a good deposit (15%) This was in the 80's things may've changed. It was a great help, but they felt it gave them more control over things than I felt I wanted them to have! :rolleyes:
My OH had a few difficulties trying to get a mortgage whilst a PhD student, in the end he left it for a few months until he was a Post-Doc. It wasn't even that easy then as he was on a three year contract & some places wouldn't even consider him. He got a mg through halifax in the end.
A friend of mine works on short term contracts for the local examination board. She has worked there pretty consistently for about five years, but always on short contracts. When she bought a house (two years ago)with her husband the mortgage company discounted her income totally which reduced their buying power considerably.
You should go for decent advice, pref from an adviser in a big university town that has probably come up against this before. A big deposit has to go in your favour.
One other thought, probably not what you want to hear as newlyweds, but if you do get into difficulties you can always rent a room out, tax free, under the rent a room scheme. Some mg companies will even let you include this in your calculations.

newtothis_4

have you spoken to an independent mortgage adviser? - if not you may find that they can talk to you about a mortgage product from bank of ireland called first start. This mortgage can be held in your names or with your parent and is based on their earnings. Basically they will lend upto 4 times your parents (main earner) income + once yours. Check out

https://www.bim-online.co.uk

This has a pdf guide you can look out to explain the scheme in detail

Yorkielass

Thanks to you all for your replies.

We've found a whole of market fee free mortgage adviser and went to see them on Saturday.

As long as one of our parents acts as guarentor and the mortgage company are happy we've got plans for how we're going to progress ( what OH will do with PHD that I'm applying for permenant or at least more permenant jobs etc) then we can get a mortgage that covers the amount we want.

We're currently trying to work out which of the 4 parents is the best to be the guarantor (having to ask parents about salaries, loans etc). It's a 2 year fixed rate mortgage from the halifax they've found us which will give us slightly more than we want so that's good.

The lady said that mortgage lenders are far more flexible about guarantors than they used to be which is good for us. We should have our own home soon

toonfish

MortgageMamma wrote:

Before you look at properties take professioanl advice, preferably from a whole of market mortgage adviser, not an IFA, and get them to confirm your maximum borrowing amount

MM

any particular reason not to use an IFA?

herbiesjp

toonfish wrote:

any particular reason not to use an IFA?

Becuase an IFA may not necessarily transact mortgage business and my concentrate on investment class business i.e. savings, pensions, investments etc.

A whole of market mortgage adviser would be the equivalent of the mortgage world.

HTH

toonfish

herbiesjp wrote:

Becuase an IFA may not necessarily transact mortgage business and my concentrate on investment class business i.e. savings, pensions, investments etc.

A whole of market mortgage adviser would be the equivalent of the mortgage world.

HTH

fair comment, although many IFA's do still transact mortgages

herbiesjp

toonfish wrote:

fair comment, although many IFA's do still transact mortgages

Some will, and some will not.

Just make sure to ask them if they have access to the whole of the mortgage market (not just a panel) when it comes to the mortgage advice they give