House purchase and Mortgage woes...

LauraFox

Hello Money savers,

My husband and I just had our offer accepted for 107K on a property we really like. We have a 57K deposit and last June it was not an issue with the bank that I am currently unemployed (redundant in Dec 2010, baby arrived in June, currently on Maternity Allowance £500pm), but now we went back to the bank, and suddenly it’s an issue.

I hope a solution will be found, we are putting deposit 50%+ in an economic crisis, but dealing with this aside, I have this question:

During the negotiating process with the agency I gave the impression we would go through the sale asap, we did not expect this sudden problem with the bank. Should I still give them my solicitor’s details? (offer accepted last Friday 26/08) I want to do whatever to show everything is still going smoothly, but I do not want to tie myself yet because I don’t want to have to pay the solicitor in case sale falls through? So how do I handle the EA?

I m hoping it wont come to this, so I don’t want to spoil the impressions I have created, a bit cheeky I know, but with 57K deposit there HAS to be some light in the end of the tunnel?????

Please advise, I would love some re-assurance (bit tearful at the moment), but I want to be realistic.

Many thanks
Laura

horace_2

The estate agent may have a mortgage advisor who might be able to help.

h

puddy

what do you mean by 'its an issue' what has the bank actually said?

can you just confirm with them you are a full time mum and the mortgage be calculated on one income, does your partner earn enough for this?

i know that they are not just looking at multiples now, but also at 'affordability' so if they think that your mortgage payments will be higher than a certain percentage of your take home pay then they get funny about lending you this

i suppose they cant really count the maternity pay as you wont receive for ever and they cant predict what income if any you'll get when you go back to work, plus there will be issues with child care

however, there is tons of equity in the property!

what is your partners income?

Scully38

LauraFox wrote: »

Hello Money savers,

My husband and I just had our offer accepted for 107K on a property we really like. We have a 57K deposit and last June it was not an issue with the bank that I am currently unemployed (redundant in Dec 2010, baby arrived in June, currently on Maternity Allowance £500pm), but now we went back to the bank, and suddenly it’s an issue.

I hope a solution will be found, we are putting deposit 50%+ in an economic crisis, but dealing with this aside, I have this question:

During the negotiating process with the agency I gave the impression we would go through the sale asap, we did not expect this sudden problem with the bank. Should I still give them my solicitor’s details? (offer accepted last Friday 26/08) I want to do whatever to show everything is still going smoothly, but I do not want to tie myself yet because I don’t want to have to pay the solicitor in case sale falls through? So how do I handle the EA?

I m hoping it wont come to this, so I don’t want to spoil the impressions I have created, a bit cheeky I know, but with 57K deposit there HAS to be some light in the end of the tunnel?????

Please advise, I would love some re-assurance (bit tearful at the moment), but I want to be realistic.

Many thanks
Laura

Sorry to hear about the redundancy, I was made redundant last year to. As for handling the EA, you'll need to show them that you can still proceed with the house sale and have the funds available and an agreement from the bank to show that even though you are redundant your bank has agreed on a mortgage for you.

If the bank refuses you a mortgage (depends on what your hubbie is earning), then unfortunately all bets are off until you return to work.

If bank gives you the go ahead in writing, show this to the EA and proceed, but to go further you have to have that agreement from the bank. The EA will not entertain you unless you are a cash buyer, because you have been made redundant and therefor would not be able to afford the mortgage, so you have to show them that you can, but it will be based on your husband's wages not mat pay.

What is the problem with the bank? Have they refused you a mortgage?

LauraFox

Hi,

thanks for the replies so far. It wasnt nice being made redundant but I see it as an opportunity to do something I REALLY like for a change, we ll see. I hope others in similar situation also find something better and more rewarding..

I didnt want to hussle you abt the mortgage here because I v put it on another thread on this website under mortgages, titled "Mortgage and new baby, I need your advice!". The full story is there (and I m not getting many replies) but basically now they re saying if we take mortgage out as a couple they can only give 25K, and if just my hubby (salary 15K) only 41K, but we need 50K.
I was made redundant but we have a joint account with the bank 7 years now and the balance has been over 10K for 5 yrs, I own a house abroad, I have shares, I pay my credit card in full each month, never went overdrawn, so when we see the bank manager again in 10 days I hope I ll be able to sweet talk him into giving 50K....

But I need to buy some time with the estate agent, do I give the solicitors details and then delay things, saying bank advisors on holiday (true) ? On the other hand, is the mortgage always delayed like this, is it something common and am I panicking unnecessarily here? If we see the bank manager in 10 days, thats 15days after offer accepted, but am not sure if we ll need new appt for he application or can do the same day.. Too vague I guess, I m sorry abt that...

Laura

LauraFox

horace wrote: »

The estate agent may have a mortgage advisor who might be able to help.

h

We were planning to go to brokers but they admited they do not have access to the whole of the market, but only to the whole of the market available to brokers.. So we looked around using internet comparison websites and we believe we have found the best product for us, with the bank we bank with..

ruggedtoast

If they don't get your solicitors details sooner rather than later they will want to know why. You can string out the mortgage approval a bit longer.

You need to speak to a mortgage broker asap. It shouldn't be difficult for your husband to borrow 3.5x income with your ltv, I would just try a different lender.

Scully38

LauraFox wrote: »

Hi,

thanks for the replies so far. It wasnt nice being made redundant but I see it as an opportunity to do something I REALLY like for a change, we ll see. I hope others in similar situation also find something better and more rewarding..

I didnt want to hussle you abt the mortgage here because I v put it on another thread on this website under mortgages, titled "Mortgage and new baby, I need your advice!". The full story is there (and I m not getting many replies) but basically now they re saying if we take mortgage out as a couple they can only give 25K, and if just my hubby (salary 15K) only 41K, but we need 50K.
I was made redundant but we have a joint account with the bank 7 years now and the balance has been over 10K for 5 yrs, I own a house abroad, I have shares, I pay my credit card in full each month, never went overdrawn, so when we see the bank manager again in 10 days I hope I ll be able to sweet talk him into giving 50K....

But I need to buy some time with the estate agent, do I give the solicitors details and then delay things, saying bank advisors on holiday (true) ? On the other hand, is the mortgage always delayed like this, is it something common and am I panicking unnecessarily here? If we see the bank manager in 10 days, thats 15days after offer accepted, but am not sure if we ll need new appt for he application or can do the same day.. Too vague I guess, I m sorry abt that...

Laura

To be brutally honest Laura, you're not going to be able to afford to buy the house and no amount of sweet talking will get the mortgage advisor to go above the maximum allowance of 41k.

You're details so far are as follows

Purchase price £107k
Mortgage £ 41k
Deposit £ 57k

Shortfall £9k

Although it may not seem like it, that's a lot to add on to a mortgage when you're just using hubby's earnings of £14k per year (i'm assuming that's take home pay and not gross earnings)?

That's already 3 times your husbands earnings. While some banks might off 3 1/2 times the wages, you're talking about going way above your max, and the mortgage provider will understandably worry about repayments. It doesn't matter what you already have its what you can afford now. And based on those figures it's above your income levels. Did you offer the full amount of the house that you put an offer in for?

With a baby on the way you're going to be spending a fortune and if you return to work, you've got childcare costs, do you really want to go over your max? Think about the implications if hubby loses his job/gets sick. There are so many things that can go wrong with going above the max of your budget and you could lose your home.

If the offer is accepted, you can tell the EA that you've got to find a solicitor, but to string it out, the people you're buying off may want to rush, i've actually told a couple who took to long to get their solicitors details to mine, to forget it as something didn't feel right. You can only stall reasonable for about ten days or so, but the EA will suspect somethings not right if you keep stalling.

LauraFox

Scully38 wrote: »

To be brutally honest Laura, you're not going to be able to afford to buy the house and no amount of sweet talking will get the mortgage advisor to go above the maximum allowance of 41k.

You're details so far are as follows

Purchase price £107k
Mortgage £ 41k
Deposit £ 57k

Shortfall £9k

Although it may not seem like it, that's a lot to add on to a mortgage when you're just using hubby's earnings of £14k per year (i'm assuming that's take home pay and not gross earnings)?

That's already 3 times your husbands earnings. While some banks might off 3 1/2 times the wages, you're talking about going way above your max, and the mortgage provider will understandably worry about repayments. It doesn't matter what you already have its what you can afford now. And based on those figures it's above your income levels. Did you offer the full amount of the house that you put an offer in for?

With a baby on the way you're going to be spending a fortune and if you return to work, you've got childcare costs, do you really want to go over your max? Think about the implications if hubby loses his job/gets sick. There are so many things that can go wrong with going above the max of your budget and you could lose your home.

If the offer is accepted, you can tell the EA that you've got to find a solicitor, but to string it out, the people you're buying off may want to rush, i've actually told a couple who took to long to get their solicitors details to mine, to forget it as something didn't feel right. You can only stall reasonable for about ten days or so, but the EA will suspect somethings not right if you keep stalling.

Thank you, Scully38.
the house was on the market for 115K.
My thoughts are that if we show that we have back up plans in case we struggle with repayments, they ll give the 50K? I could sell my shares, or end my life insurance contract, wors case scenario sell the other house, but that would be too extreme as it s worth over 200,000 euro.

Baby was born in June, another boy, so we hardly have to buy anything, we re using same clothes, pushchair, etc as with the first. The only expense is nappies.

About returning to work, it will be only for the hours my husband is at home, so he ll be with the children (so night shifts) OR work from home, I have a few ideas in mind, I can provide antenatal classes and get the couples to come to my house, I also have a professional birthing pool that I can rent out, I can to also do translating, these are only some of my ideas.

HAMISH_MCTAVISH

Sorry to hear about your dilemma.

Banks today are rationing mortgages because they don't have sufficient money to lend. They do this by constantly changing the eligibility criteria to reduce the pool of borrowers to match the pool of available funding.

You'll need to go to a mortgage broker. Given your assets and deposit size, it's absurd that you can't get a 50K mortgage. Even by current absurd mortgage lending standards.

Shop around, you should get one somewhere.

Scully38

LauraFox wrote: »

Thank you, Scully38.
the house was on the market for 115K.
My thoughts are that if we show that we have back up plans in case we struggle with repayments, they ll give the 50K? I could sell my shares, or end my life insurance contract, wors case scenario sell the other house, but that would be too extreme as it s worth over 200,000 euro.

Baby was born in June, another boy, so we hardly have to buy anything, we re using same clothes, pushchair, etc as with the first. The only expense is nappies.

About returning to work, it will be only for the hours my husband is at home, so he ll be with the children (so night shifts) OR work from home, I have a few ideas in mind, I can provide antenatal classes and get the couples to come to my house, I also have a professional birthing pool that I can rent out, I can to also do translating, these are only some of my ideas.

If you're dead set on getting that house, nothing from any of us will dissuade you. But, you can only stall so long before parties get nervous. Look around different banks and building society's, you're not a FTB, so wouldn't qualify for any of the 'perks' that go with that. But there may be one or two building societies that may offer the 3.5 of your hubbies salary, but you'll need to get that in writing within the next week or people will start getting concerned that you've not even given your solicitors details. Don't forget about the cost up front for the local searches and insurance.

I've just had a luck and there's not many (found only potentially one) that may offer you a mortgage, based on your details, so it's going to be tricky. You really should have got your mortgage agreement prior to looking at houses. As if you see a house you love and can't get a mortgage it leaves a horrible feeling.