Low Income Mortgage

Suarez

Would I still get it if I'm 24? My LHA rate is £50 per week for 1 Bedroom shared and £70 for 1 bedroom.

I tried messaging you but there's no link on your profile.

HappyMJ

Suarez wrote: »

Would I still get it if I'm 24? My LHA rate is £50 per week for 1 Bedroom shared and £70 for 1 bedroom.

I tried messaging you but there's no link on your profile.

No need to message me. I don't like the PM's I get and anything can be discussed in the open. OK you won't get it on £50 a week. Fair enough. I thought you were older. Do you have plans to have a partner and children? There are costs involved in buying and selling and you really should look at staying in a property for at least 7 years for the rent/buy calculation to be in your favour. Do you know what the interest rate and mortgage payment would be on the amount you are proposing to borrow is? Do you know what additional costs there are in owning a home that a renter would not have such as building insurance and gas checks? Do you have some way of paying for the mortgage for 6 months in case you become sick or lose your job. Anyone has the same problem but your budget would be even tighter than most. A renter would get housing benefit from day 1 and mortgage help comes after 6 months.

I am just advising you to be careful. You do have a very low income and can't really support a mortgage (in my opinion). But maybe you can..and would really like to go for it. That is up to you but when presenting your proposal to borrow money you need to prove you do really have the money to spare to pay the mortgage. The bank will be taking a risk on such a property and they want that risk to be as low as possible. If you had a 25%+ deposit I would say yes but a 10-15% deposit (after purchase costs and mortgage fees) makes the interest rate higher due to the risk being higher.

The other thing too...Where has this £7,500 come from? If it's from savings can you prove consistent savings over the years? That will be great evidence to present to a mortgage underwriter to prove you can save and pay the rent at the same time.

Suarez

HappyMJ wrote: »

No need to message me. I don't like the PM's I get and anything can be discussed in the open. OK you won't get it on £50 a week. Fair enough. I thought you were older. Do you have plans to have a partner and children? There are costs involved in buying and selling and you really should look at staying in a property for at least 7 years for the rent/buy calculation to be in your favour. Do you know what the interest rate and mortgage payment would be on the amount you are proposing to borrow is? Do you know what additional costs there are in owning a home that a renter would not have such as building insurance and gas checks? Do you have some way of paying for the mortgage for 6 months in case you become sick or lose your job. Anyone has the same problem but your budget would be even tighter than most. A renter would get housing benefit from day 1 and mortgage help comes after 6 months.

I am just advising you to be careful. You do have a very low income and can't really support a mortgage (in my opinion). But maybe you can..and would really like to go for it. That is up to you but when presenting your proposal to borrow money you need to prove you do really have the money to spare to pay the mortgage. The bank will be taking a risk on such a property and they want that risk to be as low as possible. If you had a 25%+ deposit I would say yes but a 10-15% deposit (after purchase costs and mortgage fees) makes the interest rate higher due to the risk being higher.

I have a partner and she is finishing Uni in a couple of months. She has a job working minimum 8 hours a week alongside uni.

I calculated the following :

Mortgage : £230
Electric : £40
Gas : £40
Water : £40
Council Tax : £60
TV : £10
Phone : £25
Insurance : £20
Car : £80
Food : £80

£625 leaving £175 margin - and all those estimates are at the higher end of what it will cost.

Suarez

HappyMJ wrote: »

The other thing too...Where has this £7,500 come from? If it's from savings can you prove consistent savings over the years? That will be great evidence to present to a mortgage underwriter to prove you can save and pay the rent at the same time.

I've been saving £300 a month for the last 2 years since I have been working.

HappyMJ

Suarez wrote: »

I have a partner and she is finishing Uni in a couple of months. She has a job working minimum 8 hours a week alongside uni.

I calculated the following :

Mortgage : £230
Electric : £40
Gas : £40
Water : £40
Council Tax : £60
TV : £10
Phone : £25
Insurance : £20
Car : £80
Food : £80

£625 leaving £175 margin - and all those estimates are at the higher end of what it will cost.

The higher end? Really...

Electric and gas costs more than £40 a month. Average gas usage is 16,500kWh a year at 4p a kWh is £55 a month. Electric avaerage is 3,300kWh per year at 15p a kWh is £40 a month. Minimum Band A Council tax here is £80 for a couple. TV licence is £145.50 a year £12 a month. Phone for £25 is that including landline, broadband and a mobile phone? Everyone seems to have broadband these days that's £14.60 for the line rental and £8 for the broadband and £10 for the mobile. £35 a month. A car for £80 a month? I don't think so...at 15 pence a mile for petrol alone that will get you 500 miles a month then you have servicing, MOT, tyres, and the really big one depreciation unless you really don't mind going around in a banger all the time and getting your mates to fix it for free. Last time I had a car it was at least £150 a month all in with very minimal mileage. Food for £80 a month. That is far too low for 2 people. You should be looking at budgeting £200 a month minimum.

If the bank sees those figures they will replace them with a set of standard figures they use. If you go onto the CCCS website and go through debt remedy (pretend you have a debt) then use the minimum figures for each category.

I think you should wait until your partner has a full time job before considering a mortgage. You will find it a struggle to support two people and pay a mortgage with no help from housing benefit in the future. Her moving in with no job and you will get housing benefit on the figures provided.

HappyMJ

Suarez wrote: »

I've been saving £300 a month for the last 2 years since I have been working.

Are you paying rent or board on that?

MiniSis

£80 a month on food? Buildings and contents insurance would be a bit more than £20 a month also. What about car insurance, tax, servicing, clothes, general living... Seems very tight to me!

Suarez

HappyMJ wrote: »

The higher end? Really...

Electric and gas costs more than £40 a month. Average gas usage is 16,500kWh a year at 4p a kWh is £55 a month. Electric avaerage is 3,300kWh per year at 15p a kWh is £40 a month.

Is that the average for the average UK household? I will be on my own and out of the house Monday to Friday 8 til 6.

Minimum Band A Council tax here is £80 for a couple.

The council tax on this house is £900 per year and I will get single rate discount.

Phone for £25 is that including landline, broadband and a mobile phone? Everyone seems to have broadband these days that's £14.60 for the line rental and £8 for the broadband and £10 for the mobile. £35 a month.

I don't need land line or broadband and my mobile is £25 per month.

A car for £80 a month? I don't think so...at 15 pence a mile for petrol alone that will get you 500 miles a month then you have servicing, MOT, tyres, and the really big one depreciation unless you really don't mind going around in a banger all the time and getting your mates to fix it for free. Last time I had a car it was at least £150 a month all in with very minimal mileage.

Tax £2.50
Fuel £25 (70mpg diesel)
Insurance £25
Maintenance £30 all of which I do myself apart from MOT.

Food for £80 a month. That is far too low for 2 people. You should be looking at budgeting £200 a month minimum.

I will be living alone and manage to live on less than £80 now.

Suarez

HappyMJ wrote: »

Are you paying rent or board on that?

Yes £200 a month.

Suarez

MiniSis wrote: »

£80 a month on food? Buildings and contents insurance would be a bit more than £20 a month also. What about car insurance, tax, servicing, clothes, general living... Seems very tight to me!

My current house is £150 per year for both and it is the same size.