Mortgage poser/challenge!

LizEstelle

Any suggested solutions to this 'insoluble' problem...?

I have a tenant who lives frugally and is easily able to keep up with her rent of £500/month, despite being on a moderate income. She has a flawless payment record dating over 4 years.

She would like to get on the housing ladder in an area where there is nothing available below £110K. Her salary is only around 13K and she has little by way of capital to produce a deposit. No partner. Age late 40s. 1 dependant child.

A_Nice_Englishman

A few questions to kick the discussion off:

How much maintanance does the father pay?
Does she claim all the tax credits / benefits she is entitled to?
Has she looked into shared ownership with a housing association?
Has she looked at ways of increasing her income such as studying for qualificatins or taking a second job?

Has she considered moving to a cheaper part of the country?

Why does she want to take on all the risks of buying a proiperty when prices are , in many people's opinions, too high?

Are you feeling philanthropic enough to sell her the property at below the market value?

Any prospect of her hooking up with a rich fella?

LizEstelle

1. She is separated and there is no settlement or CSA ruling.
2. Yes
3. Yes - no go.
4. She already did so, gaining a degree...made hundreds of job applications. None of the useless, local employers are interested in a late 40s, female, single mother. They invent other reasons for not taking her.
5. No. Child-school repercussions.
6. For the same reasons that all other FTBs are doing so.
7. No
8. I assume this is meant in jest.

A_Nice_Englishman

Actually the last two were meant in jest:D

I think her best course of action is to get advice on her career in general and the application and selection process in particular. She really ought to be able to get more than £13K.

Perhaps you could tell us more about her job, qulifications and experience and a mod move the thread to a more appropriate board?

LizEstelle

Your thought seems to imply that this is not a serious mortgage enquiry... which it IS, actually.

She has taken plenty of advice on her situation... most of which seems to imply between the lines that:

1. she should not have been so stupid as to take a degree in English but rather something more specialised

and

2. she should not have bothered with taking a degree at all since nobody's going to employ a single woman in her late 40s with children at any graduate rate.

Make no mistake, this lady is successfully bringing up a family more or less unaided on a very moderate income AND managing to hold down a full time job at the same time. A real hero(ine). She's articulate, hardworking, experienced in the school of life and holds a II1 honours degree ...

... none of which cuts any ice with our local, dimwit employers who would rather give jobs to inexperienced 21 yr-olds... and we all know the reason for that.

A_Nice_Englishman

I don't think it can be a serious mortgage enquiry until she can earn enough to borrow enough to buy a property. That would mean at least £25K - £30K in this case.

I would suggest teaching as the most promising career path if she can finance / find time for her PGCE. If she was a maths or sciance graduate I think she would be snapped up. English is not so much in demand though.

LizEstelle

Ok thanks. I did realise it was a tall order.

UK007BullDog

Right now she is behaving like a victim. However her attitude needs to change. If bettering herself means moving to a new area where her skill set is more likely to help her get a better paying job, then yes, she should move and take her child with her.

As she is already in the 40's she needs to maximise the years she has left. As she is a low earner her pension will also be very low. So there is no way for her to servie a mortgage when she is past 65. Unless she keeps on working or her child supports her.

Maybe she also needs to see someone who can do a makeover with her CV, her as a person and instill some positive vibes. I say this as ever possibility mentioned above is being discounted.

A child can be moved to another school. I moved my kids around 3 countries and I was also moved around as my father and husband were in the forces.

She might want to look at training as a teacher. There is a shortage of them here in London and starting salaries are £24K.

regularsaver1

Trainee teachers get paid too

LizEstelle

Is there any way in which I can vouch for her rent payment situation as proof of 'ability to pay' which might stand her in good stead? Does this cut any ice with lenders?

A_Nice_Englishman

To be honest, I don't think you would be doing her any favours by helping her take on a mortgage if she is only just getting by at the moment.

There may be lenders who will offer mortgages but they will probably want a substantial deposit and higher then normal interest rates to reflect the extra risk.

Borrowing £100K would cost more than her rent on current interest rates.
What if interest rates rose to 7%, 8%, 9% even 10%. This is not impossible over the next 25 years.

What if she lost her job for any reason? There is no help with mortgage payments for 9 months

Where would she find the money for repairs?

Sorry to sound negative, and I do feel sorry for her, but she really needs to increase her income (or wait for property prices to fall substantially) before even thinking about buying.