moving house - joint mortgage on one income?

raggydoll_2

Hello,
I was wondering whether anone could offer any suggestions on mortgage companies to approach for our circumstances or anything we can change to give us more flexibility.

We currently have a mortgage of £102,000 and are paying interest only. We have just accepted an offer on our property for £148,000 leaving £46,000 equity.

We have seen a house we would like to put an offer on. We would be prepared to offer a maximum of £110,000 but hope to get it for a little less.

We currently have about £5,000 of debt and are paying £300 per month. This debt will be paid off with the proceeds of the house sale.

We would like to put down a £30,000 deposit and have £80,000 on mortgage (max). This would be repayment instead of interest only and online calculators suggest that that mothly payments will remain roughly the same.

I am currently self employed but have not mad a profit. My husband is earning around £23,000. We also have a 20 month old child. I will be retraining after the move with a view to being full time employed within 18 months. As we are already meeting the repayment and our outgoings will be significantly reduced in the new property we are very confident we can continue to meet repayments.

Our current lender initially said no as both i and my daughter are considered dependants on my husbands wage but after some pushing said they could only do it on a 35yr mortgage at 4.09%.

Are there other options? Any suggestions gratefully recieved

kingstreet

Lenders like Halifax and Nationwide will take things like tax credits and child benefit into account. These may help you get the amount you want but without having to select such a high initial term.

You say your husband is earning "around" £23k? What do you mean by around? If we're talking about basic, overtime, bonus and other variables being needed, it will make the number of lenders available to you shrink somewhat.

If he's on £23k flat salary, your other benefits should make an £80k mortgage fairly straightforward with the repayment of all your existing credit on completion.

raggydoll_2

I was guestimating based on his take home weekly pay (which is what i gave our current lender). I've calcuated it properly now and its just shy of £22,000.

I've just tried a few online calculators on the companies websites and the only one to come anywhere near so far is Nationwide at £73,300. Still a way off.

kingstreet

It's your inclusion on the application which is making the big hole in affordability.

If he buys in his name alone, Halifax will lend £108k on a C pass at 73% LTV. Adding you as a non-earning borrower drops the maximum to under £68k.

How would you feel about buying in his name and being added to the mortgage and deeds later when you're making a profit or working?

raggydoll_2

That wouldn't be a problem at all as far as i'm concerned. I hadn't considered that it could be an option!

kingstreet

raggydoll wrote: »

That wouldn't be a problem at all as far as i'm concerned. I hadn't considered that it could be an option!

You'll be required to sign a consent to mortgage form as you're going to be living in the property but most lenders won't have a problem with it.

It's recently come out some people don't declare their children on an application to beat the affordability checker and this is likely to be looked on unfavourably if you were to try it. Applying in one name appears to be a more honest approach.

raggydoll_2

That's excellent, thank-you so much! That's exactly the sort of solution i was hoping for.