Body blow over mortgage

jojaca

I have 15k deposit and was looking for houses for 80k or less in my area. So i need to borrow £60-65K the only trouble is i only earn 17K a year, but do have 3 small children and get work/child tax credits to boost my income. I have no loans/credits cards etc.

I went to see Lloyd's Mortgage advisor, after we went through all the details he said i was only entitled to 41K. This knocked the wind out of my sails to the point i questioned whether is worth working paying £400 a month rent or i would probably be better off financially not working and joining the Jeremy Kyle benefits gang.

kingstreet

So, you have a basic salary of £17,000 per annum. Buying alone? Partner's income? Any variable earnings over and above that? Maintenance?

How much do you receive in;-

working tax credits?
child tax credits?
child benefit?

How old are you?

Do you have any loans, HP or credit card balances? If so, please set out the monthly payments, remaining term and balance of cards.

Do you have any childcare costs, pay maintenance?

kingstreet

I used the Halifax affordability calculator.

£17,000 basic.
£2,392 child benefit

No existing credit.
No maintenance or childcare.

1 applicant
3 dependents

£68,870 maximum over 30 years.

http://www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_affordability_calculator/default.aspx

When you use it, separate child tax credit and child benefit and enter them under "child tax credit" and enter "working tax credit" on its own, as 100% of that is taken into account, while only 60% of child tax credit and child benefit qualifies.

jojaca

Me and partner are applying for mortgage(she has just lost her job)

We have no existing credit.

2 applicants, 3 dependants.

Our Child Tax at the moment is £155 a week (Just had our working tax taken away because we were both working, but now my partner is not). So not sure what our future child/work tax is going to be (time of year for P60).

Im 34 and she is 31.

Thanks kingstreet for reply.

kingstreet

It's a dependent, non-working partner which is causing the problem.

Who receives the tax credits? Who receives the child benefit? Who holds the deposit?

If you add £8,060 of child tax credits to the income, but include a non-working partner, making it two applicants with only one income, the output falls to £43,325.

If the property can be purchased in your name alone, with a sole mortgage, you should be able to borrow the amount you need.

Simon_gloster

Lloyds will only take 60% of child tax credits and child benefit but 100% of working tax credit.

If the award letters are nit in your name and your partner I'd nit on the mortgage then they cannot be used. You will have to declare their dependency though if they live with you and you go it alone.

Seems its s true AIP and a no goer on all accounts.

jojaca

we do have separate bank accounts, My lloyds account with deposit and my partner banks with santander and she recieves the child benefits and working/child tax credits.

Simon_gloster

So you can only use the benefits if she's on the mortgage in which you'll havebto declare her as a non working adult and. 3 kids. She needs to get a job for this to happen, you probably know that do I'm sorry, just want to give you a solution.

jojaca

Cheers, I did not realise i would better off as sole applicant, if partner is not working. Learn something new today, anyway. Lloyds mortgage advisor did not give me an explanation.

Dave_Ham

Be very careful who the credits are attributed to on the application as some lenders do not factor them in if no income is keyed.

I would not rule this out of hand without the full specifics being checked, as I think it may be possible.

This is an outside chance, although I still fancy it achievable.

Good luck

_Andy_

"not working and joining the Jeremy Kyle benefits gang." - grow up.