Best time to apply

solventblackbird

I am getting ready to apply for a mortgage. My earnings are not going to change in the next year or so. But in five months time my expenses are going to decrease very significantly (By £900 per month - reduction due to me not needing to pay for childcare any more)

I need to know how much house I can afford so I can target my search. Would I be better off waiting until my expenses have reduced before I make an application - or is my income all that matters?

hcb42

wait

there are calculators on here to give you an idea though in the meantime

GMS

It will vary from lender to lender, sometimes hugely.

The less you have in outgoings/commitments the better generally.

solventblackbird

thank you - that is what I suspected. And the truth is, while I could afford (I think) to pay a mortgage on top of the childcare, I'd rather not as that extra £900 a month is my buffer against a boiler blowing up etc - it's a scary thing for a renter to realise that she's now going to be responsible for all that!

I will wait then - a few months longer won't kill me.

GMS

You would be able to get an idea of what you could borrow at any time. Applying may need to wait until your expenses have been reduced but if you can borrow enough then maybe not.

Have a chat with a broker. Should be free for an initial chat so that way you will have an idea where you are likely to be looking.

solventblackbird

I think that's what I'm going to do. I've checked a few calculators but our situation is unusual (I'm employed, my husband draws a small salary from a company we both own and we both take a decent yearly dividend) so it's probably essential we go through a broker.

chunkychocky

When we took out a mortgage just over a year ago they took childcare costs into account, though hubby had a loan that only had 4 months left and they decided to exclude that from our 'outgoings' figure when they calculated our affordability.

solventblackbird

thank you - that's really interesting information.

I think I will just have to lay it all out for a broker and accept the advice I am given. I'd prefer to move during the school summer holidays but if I need to wait until I'm not paying childcare, won't be able to apply for a mortage until May... that is cutting it very, very fine.

GMS

Some lenders will ignore loans with less than 6 months to run. You need to find one to view the childcare in the same way.

You could potentially apply for a mortgage excluding the childcare costs as they will not be valid when you complete on it. Just make sure that the childcare is declared as being in place as it will show on bank statements (I assume) with the fact that it will cease to be paid in between application and completion to be noted.

solventblackbird

Yes, certainly will show on bank statements.

That is good advice though, thank you. I think my next step is to find a decent broker. It it important to work with someone face to face? I know L and C are recommended round here, but I'm a little wary of sending off my documents to what amounts to a giant call centre. Am I being over cautious?

GMS

Many people prefer telephone advice. Its a personal choice.

For an idea initially you dont really need documents. Just provide all of the info correctly to get an accurate estimate of where you may be.

Any application would require documents