Mortgage Advice please?

ATM_2

Hi everyone,

My mum is 47 with 2 dependants.

She is set to receive around 95k from her current house as a divorce settlement.

The houses she is looking at are around 125k

She has a small part time income of around 4-6k pa.

She also receives benefits.

I have been looking at mortgages on compare sites etc and they never bring back any results. I am just looking for some general advice and she will of course be contacting a professional when her current house is sold.

Now my questions:

Can benefits be included as an income for a mortagage app?
Will she be able to find a mortgage with such a low income or will the very high Loan/Value ratio help?
In these cases would a personal loan be better?

Any help would be greatly appreciated.
Thanks,

katejo

ATM wrote: »

Hi everyone,

My mum is 47 with 2 dependants.

She is set to receive around 95k from her current house as a divorce settlement.

The houses she is looking at are around 125k

She has a small part time income of around 4-6k pa.

She also receives benefits.

I have been looking at mortgages on compare sites etc and they never bring back any results. I am just looking for some general advice and she will of course be contacting a professional when her current house is sold.

Now my questions:

Can benefits be included as an income for a mortagage app?
Will she be able to find a mortgage with such a low income or will the very high Loan/Value ratio help?
In these cases would a personal loan be better?

Any help would be greatly appreciated.
Thanks,

I can't see how your mum would be able to make regular repayments on such a low income. I also doubt whether it would be any different with a personal loan (which i suspect you could not use for a property purchase). If she now needs benefits to top up her basic income, how could she cope if interest rates went up. Are there smaller properties which she could consider? I don't know where you are.

ATM_2

Although her income from employment is low, she receives around £1500pm from benefits.

Gonzo33

We have lenders on our panel that would include benefit income with varying percentages from around 40% of the benefit income up to 100% of the benefit income dependent on what the benefit is. However the drawback is that most lenders require the benefit total to be less than the earned salary. This may be your Mum's sticking point.

I think her best bet would be to see a good local mortgage broker nearer the time because if she currently has A1 credit and as she will have an excellent loan to value and the mortgage will be tiny there may be someone willing to take a chance on her, but I wouldn't get my hopes up.

kingstreet

You need to break down the exact gross annual amounts.

What is her gross annual income from employment?

What benefits does she receive, how much and how often?

Typically, a lender may allow a portion of things like child tax credits, child benefit and maintenance, if the latter is provable.

She has a very low loan to value, not a very high one. £30k on £125k is 24% loan to value.

ACG

Depending on the benefits, this should be a piece of cake to do. Probably one for a broker though unless your prepared to ring round lenders and/or check criteria. Ive just done a mortgage for someone whos sole income is from benefits - that was a little trickier but still got him a mortgage with a high street lender on a decent enough rate.

If you have completed a load of price comparison sites - expect a fair few phone calls come monday morning from advisors.