Can I get mortgage if in receipt of tax credits?

Newgal

Looking for some advice on whether I could get a mortgage.

Circumstances are quite tricky: I work part time and earn just £8000 however that is bumped up by tax credits by about £10,000 then add child benefit and I'm up to almost 20,000.

The bulk of my income is tax credits so will any lender accept that?

I have the deposit to buy a house.

Hope someone could shed some light, I'm not very hopeful but thought its worth a try.

(background:divorced single mother, 2 young children, working part time as 1 child still not school age)

ACG

Yes you would get a mortgage - do you have a figure in mind you were looking for?

Newgal

Thanks ACG

I'm not that sure about figures but I have deposit of £30000.
I think I can borrow about £70,000 (mortgage calculator).

Do you know which lenders would accept this sort of case?

ACG

Most if not all will accept tax credits.

Please dont presume im recommending as im not...i just have their "at a glance" sheet in front of me as im about to do my own mortgage - But the Skipton will allow 100% of WTC and CTC in their calculations.

They also accept 100% of child maintenance so long as its court or CSA ordered - if your in receipt of that.

They have cut off with the childrens ages but you said you have young children so i suspect you will be fine.

It might be worth having a word with a mortgage advisor - the last thing you want to do is apply to lenders who might not accept 100% of the tax credits - and its worth checking other lenders not just the skipton as they may not be the best option for you.

Newgal

Unfortunately CSA have ordered my former husband to make payments but I've never received them, so can't include that.

Good news that some banks will except 100% of tax credits though.

Does anyone know if I need to apply as employed or self employed as I receive about £2500 pa in 1 part time job (10 hrs per week) and £6000 pa in other part time job where I receive monthly £500 in bank but need to sort out my own tax etc..?

This is a new arrangement and I haven't done any of the tax stuff but I suspect I can do that at the end if the tax year??

ACG

Do you have a contract of employment etc?

If so then your employed.

Im not sure about the tax bit, you might be best speaking with an accountant or hmrc.

Newgal

I am essentially working for a close family member for £500 per month with no contract but I intend to keep taxes in order. I have written to hmrc about this.

ACG

Its worth clarifying that situation before you make an application.
Being self employed would cause some issues.

Also, if your relative is making you self employed in order to avoid his/her responsibilities as an employer then you could find that your seen as employed anyway and your relative could be causing problems for themself down the line - probably more so if theyre doing something similar for people outside the family.

Newgal

Thanks, it actually started as a favour and has worked out quite well all around. I was hoping it was like any other job where you get paid cash in hand and declare your income. I don't want to be causing ny issues for anyone else.

ACG

You would have to explain it to the underwriters - potentially causing an issue but im not sure how they would view it.

It would make your life easier if you were on the books.

Newgal

I will see if that's possible because it will hopefully make getting the mortgage that little bit easier.