Low Income Mortgage

Suarez

I am looking for a mortgage for £42,500 with a £7,500 deposit.

I cant seem to find any lenders who will lend on a small income. My income gross is £10,500.

I found the Post Office on moneysupermarket but upon reading the T & Cs the minimum income for mortgages is £20,000.

Can anyone advise? I have a good credit reports with no CCJs etc. 2 credit cards, phone contract and no missed payments.

Dave_Ham

There are lenders that will do this. A decent broker should be able to source fairly easily, but expect to a pay a fee as no broker is likely to work for the proc fee on this amount..

Good luck

HappyMJ

Suarez wrote: »

I am looking for a mortgage for £42,500 with a £7,500 deposit.

I cant seem to find any lenders who will lend on a small income. My income gross is £10,500.

I found the Post Office on moneysupermarket but upon reading the T & Cs the minimum income for mortgages is £20,000.

Can anyone advise? I have a good credit reports with no CCJs etc. 2 credit cards, phone contract and no missed payments.

Why? If you rent you would get housing benefit and the net cost is cheaper and less risky than any mortgage. This is a very low value for a house. What sort of house is it? If it's shared ownership then it is unlikely as you have rent to pay as well.

What is your net worth? You assets/savings less your liabilities/credit card balances?

I can't see it working on an affordability level.

Suarez

HappyMJ wrote: »

Why? If you rent you would get housing benefit and the net cost is cheaper and less risky than any mortgage. This is a very low value for a house. What sort of house is it? If it's shared ownership then it is unlikely as you have rent to pay as well.

What is your net worth? You assets/savings less your liabilities/credit card balances?

I can't see it working on an affordability level.

How can I get housing benefit if I am working?

It's a house that needs a bit of work - its not shared ownership. I dont have any credit card balances or loans.

HappyMJ

Suarez wrote: »

How can I get housing benefit if I am working?

It's a house that needs a bit of work - its not shared ownership. I dont have any credit card balances or loans.

Because your income is so low. I work full time on a low income and get £91 a week housing benefit and have around £6,000 in cash. Other people can get much more and there is no upper limit on income. You could get housing benefit on incomes in excess of £50,000 if you had 6 children in Kensington and Chelsea and require a 4 bedroom house.

How will you raise the money to improve the property?

Suarez

HappyMJ wrote: »

Because your income is so low. I work full time on a low income and get £91 a week housing benefit and have around £6,000 in cash. Other people can get much more and there is no upper limit on income. You could get housing benefit on incomes in excess of £50,000 if you had 6 children in Kensington and Chelsea and require a 4 bedroom house.

Yes but I don't have children.

Suarez

HappyMJ wrote: »

How will you raise the money to improve the property?

I already have money put aside for this.

HappyMJ

Suarez wrote: »

Yes but I don't have children.

Neither do I to get the 1 bedroom LHA rate. It was just an example.

Suarez wrote: »

I already have money put aside for this.

In excess of the £7,500? Do you know how much it would cost to renovate the property? Is the property mortgageable in it's current state? Most mortgage providers require the property to be in good repair to lend money on. This property sounds like an investors type property for someone who has the cash to buy it, update it and sell it on.

Suarez

HappyMJ wrote: »

Neither do I to get the 1 bedroom LHA rate. It was just an example.

Well I have put my details into the DirectGov benefits advisor and it says I am not entitled to anything...

The_J

Try Principality and Leeds.

HappyMJ

Suarez wrote: »

Well I have put my details into the DirectGov benefits advisor and it says I am not entitled to anything...

On £10,500 of income I am very suprised. Let me figure it out...

You get weekly a £71 a week personal allowance and £5 disregard, a £17.10 additional earnings allowance which is £93.10 a week or £4,841.20 a year. That gives you enough money to live on and get to/from work. You then have to pay 65% of your income in excess of that towards your rent. Your take home pay is £186 per week which gives you £92.90 of excess income. 65% of that is £60 a week. If your LHA rate is higher than £60 and your rent is higher than £60 and equal or less than the LHA rate then they pay the rest. This number is also the amount of spare income you have to service a mortgage for affordability calculations rather than using income multiples. £60 a week will not give you enough spare income to be able to service a mortgage and live comfortably...or better than someone who does not work at all and claims full benefits.