Saving for a deposit...

~evanesco~

I know this is going to get jumped on, but I do actually want some serious, sound advice. I do not want to be a scapegoat for benefit bashers, so take your posts elsewhere.

Here goes...

When (not if, when) we get debt free, we will, in theory, have approx. £500 a month surplus. I initially intend to take driving lessons, invest in a small car and arrange appropriate insurance (house, car, life). After that I think we may have £350 a month surplus.

I've been thinking about saving to get a mortgage and buy a house. Here's my query...

At the minute, we get housing benefit/council tax benefit, as I work part time and we have 2 kids. My partner is looking for work and has been for 8-10 months. Surely, from a financial point of view, it's better to stay in this situation and save money for a deposit for a house when the kids are older. What I mean is, why save and get a house when at the minute we get most of our rent paid. If we had a mortgage we wouldn't get help for paying that.... Then again, when claiming beneifts, if you have over £8000 in savings a propotion of you benefit is reduced by the amount over £8000 you have in savings. I'm going to look into the situation with regards to if the money is held in the childrens accounts, since technically it's their money, and wether that is factored into the equation when working out benefits. Is it better to take the moral or financial situation.

Evans. xox

finallydebtfree!!

my friend told me that her benefits are lower because her daughter has a fair bit in savings from her dad and grandparents.

kathyd_2

Moral....... that's what I would do.

~evanesco~

Thanks FDF,

I've had a quick look on my local councils web calculator, and there doesn't seem to be a box for Children's savings, only one for 'you and your partners cavings of over £16000'.

Also how much mortgage would I be able to get with £16000 deposit?

Obviously I don't intend to stay part time, I'm currently studying for a degree, and fully intend to get myself and my family away from what is, notoriously, a deprived area. And as said before, my partner is looking for work. I hate this situation we're in, the area, the lifestyle, the lack of potential future for my kids.

Evans. xox

Sinkingindebt_2

Surely childrens savings shouldn't come into it? Dont know but I cant think there is a part on the form that asks about childrens savings, after all the government GIVE children money for savings don't they?

Anyway, I am in a similar position, I used to own a house, it was very stressful, couldnt afford to keep it, ended up in rented house and we get a small bit of help on rent from HB.

I will stay here until a council house becomes available, as the rent is so much cheaper, I will eventually save again and buy a house.

With the current climate If you are a 1st time buyer anyone will struggle to make a start. Saving towards it is at least going towards your future independance to get off benfits.

If I bought a house now (5 years on) I would only be able to afford a tiny 1 bed flat (we have 2 kids) in a really rough area, so hardly worth it, and I would still not be able to afford it at #100K and we would all slepp in 1 room :rotfl: currently my house is quite small but we manage at least.

Bloke_with_a_simple_life

Couple of points to highlight:

1. It looks lke you plan to invest in a car @ £150 per month - does this mean taking a loan out to pay for it?? Not really an investment - more a debt!

2. Mortgages are not just given out based on the deposit, but your (or you and your partners) joint waged income and how much you can afford. If you only live on benefits (which are not really wages), don't anticipate on getting a mortgage at all from a reputable lender. If you want to buy a house, I would expect you need to either try out a "dodgy" lender or get a sizeable increase in your waged income.

3. Surprised that the government is providing you with benefits for childs savings! Which benefit is that? Not the one where you get a small sum to invest when they are first born?

Overall - there is no moral or fiancial dilema that I can see with your plan based on my limited knowledge. It is not at all feasible - no need to worry about it!

Sinkingindebt_2

HI Bloke,

yes thats what I mean its about #250-#300 to invest depending on when they were born. I would be surprised that savings for children (and this included) would be considered.

However reading back, do you intend to use money from your childs savings for the house deposit? Just a though THEN this may be classed as fraud as the money is yours really and you are pretneding it to be a childs....

Not accusing jsut thinknig aloud,

Good Luck xx

~evanesco~

Bloke_with_a_simple_life wrote:

Couple of points to highlight:

1. It looks lke you plan to invest in a car @ £150 per month - does this mean taking a loan out to pay for it?? Not really an investment - more a debt!Ummm, no, that would kind of undermine the point of getting out of debt..... The £150 was for running costs and insurances, as stated.

2. Mortgages are not just given out based on the deposit, but your (or you and your partners) joint waged income and how much you can afford. If you only live on benefits (which are not really wages), don't anticipate on getting a mortgage at all from a reputable lender. If you want to buy a house, I would expect you need to either try out a "dodgy" lender or get a sizeable increase in your waged income.I don't 'only' live on benefits! I don't understand why you think I wouldn't use a reputable lender. I have already said I intend to improve my earnings by the time my children are at the age where I would no longer be eligible for benefits (approx 14 years, 2 months, I'm sure I could save up a sizable deposit by then).

3. Surprised that the government is providing you with benefits for childs savings! Not really sure where you got that information... The government don't provide benefits based on childrens savings. The plan is to offset the amount we save over £16000 (which would result in a reduction in benefits) in one of the childrens account, I was asking wether childrens savings were taken into account when calculating benefits). Which benefit is that? Not the one where you get a small sum to invest when they are first born?

Overall - there is no moral or fiancial dilema that I can see with your plan based on my limited knowledge. It is not at all feasible - no need to worry about it!

So based on your advice, I'd still say it would be feasible, if not morally correct.

Evans. xox

~evanesco~

Sinkingindebt wrote:

HI Bloke,

yes thats what I mean its about #250-#300 to invest depending on when they were born. I would be surprised that savings for children (and this included) would be considered.That's what I thought.

However reading back, do you intend to use money from your childs savings for the house deposit? Just a though THEN this may be classed as fraud as the money is yours really and you are pretneding it to be a childs.... Fair point, if it's outside of the law, then I wouldn't do it, but yes I was planning to use the childrens accounts as 'holding' accounts.

Not accusing jsut thinknig aloud,Didn't think you was, I did ask for sound advice, and it was duly given/

Good Luck xx

Fair points made. Thank you.

Evans. xox