FTB, unsure how mortgages work.

RosiPossum

Hiya,
I received a call from my Dad the other day who said that my parents would like to help me and my husband out with a deposit for a flat so that we can pay the mortgage rather than rent and have nothing at the end of it.

We're looking at about £100k or less and we're viewing some properties next weekend.
I've checked my credit report and other than the electoral roll, it's all very good or excellent. I've sent my forms in for the electoral roll so that's in the pipeline.

I do have an overdraft of £1500 which is interest free (graduate account). I'm currently in the government's One Year Job Guarantee scheme for newly qualified nurses. I work 22.5 hours a week in a job that pays £21,400 for full time (37.5). My job right now is only guaranteed until April 2014.

My husband is currently doing agency work with a support service. He has been there for 4 weeks but has 0 contracted hours. Once he has been there for 13 weeks he will get a proper contract and regular hours with the option for overtime.
His pay is usually around £180/week right now and mine is around £900/month.

I've no idea how this would work in applying for mortgages and the like.
Any advice would be appreciated!

Rosie

monty-doggy

Your best bet is to see an independent mortgage broker/advisor, who does whole of market. You don't on paper look like you have a huge or stable income and rather than applying and getting rejected, you should have an advisor check what the best options are for you. It's all too easy to fail.

In addition, the larger the deposit you have, the more lenders will be open to you as you have more security for them to fall back on.

starbarboy

Hi there

All lenders will look at how much you earn and how secure that income is. Unfortunately at the moment I think you would struggle to get a mortgage until you were on a more permanent contract and your husband is on fixed hours and competed any probationary period. However, a mortgage broker may be able to suggest a provider that may be willing to lend to you with your existing circumstances.

Having said that, it ounces like it will not be too long before you are both in a more secure position and in which tim you will be able to plan and save for your house move.

Good luck and hope it goes well.

Stephen

ValHaller

In rough terms you will get a mortgage for up to 4 times annual income and you will need a 10% or 15% deposit. As your income is quite low, you probably will not get the full 4 times income.

I would suggest approaching a few high street lenders and asking how much you can borrow - if you do this, take in a copy of your credit report - not your credit score, which is irrelevant. Don't let them credit check you, because it is recorded on the credit record and will count against you with other lenders. Alternatively, try some lenders on line calculators to see how much you could borrow.

I think for you, there is not enough income at the moment and you would do better to concentrate on increasing your incomes and saving for a while.

Being swayed by the mantra 'rent is dead money' has led many a couple into buying a property too soon and left them in a financial mess which takes years to sort out - to the point that if they had rented and been left with nothing, they would have been much better off. At least with renting,being left with nothing is as bad as it gets. When you buy a house, it can be much worse.

TrickyDicky101

ValHaller wrote: »

Being swayed by the mantra 'rent is dead money' has led many a couple into buying a property too soon and left them in a financial mess which takes years to sort out - to the point that if they had rented and been left with nothing, they would have been much better off. At least with renting,being left with nothing is as bad as it gets. When you buy a house, it can be much worse.

^^^+1

You won't risk negative equity if you rent - whilst negative equity may not sound scary when you're young, it could mean being stuck in your property for years on end with no hope of moving on (e.g. to a new area, away from problem neighbours, on to that super job you've just been offered). This shouldn't be ignored when you consider your options.

Sycorax

I agree with the others that you'll struggle to get a mortgage in your current situation and I'd recommend you left it until both your situations are more stable and contracted and their is a history of regular repeatable salary payments.

if you do decide to go for it now then I would start by talking with your own bank as you'll have a history of 'being a good customer' with them and are likely to be more open to locking you into them by also having a mortage.

You should note that only your salary will be taken into consideration (hubby being on a 0 hours contract) and if you go for a joint mortgage your husband will be classed as a dependant and reduce the amount they're willing to lend i.e. their thinking will be that you have higher outgoings because he doesn't have a regular income.

Mortgage providers will go to your employers to confirm your employment details and the composition of your pay, so if any of your pay is made up of shift allowance s etc these may be discounted.

They'll also want evidence of where the deposit is coming from, so your parents will have to produce bank statements etc to show the cash is there and available. Your parents will also have to provide a waiver to say the cash is being gifted to you and they have no claim on the property.