Long Story Help........

hells030780

Here goes ...... i hope i don't bore anyone!!!

I currently live in a 2 bedroomed terrace with and outstanding mortgage of roughly £119k. The mortgage is in mine and my dads name and there is approximately £17k equity. I have sold for £136k. me and my partner have had an offer accepted on a house for £150k.
So with this in mind , we have been given £10k by my mother as a gift. We are looking to borrow £130k to move on....but we cant get a lender to help! Halifax my existing lender will not, also have tried Leeds building society and in the first instance they said yes then it referred to the underwrighter who said no, based on income.... i earn £8500 plus tax credits totalling £500 ish a month, my OH is self employed last 3 years accounts are gross profit of £14k £15k and £14k. our currant mortgage is £550.00 per month repayment so we can afford it but no-one will help!!!!! i am so stressed and making myself ill over the worry...... can anyone offer any help or useful advise??? Sorry for long post!!!

BitterAndTwisted

Your combined income is not sufficient to raise a mortgage of that size. A ten grand gifted deposit doesn't help matters.

The only "useful advice" I can offer you is to find a property up to the value a lender will grant you, or rent until your earnings have increased and then buy.

hamster2013

hi

please correct me if im wrong
you earn £8.5k
your partner around £14k
total around £23k
and you want to borrow £130k
i.e you want to borrow almost 6x your combined annual wage.

so you have stated that you 'can afford it'
but what if your partners business doesnt do that good this year: will you still be able to afford it?
or what if your have to leave job for X, Y, or Z reason.... will you still be able to afford it?
or what if...etc you get the picture.

no sensible lender should give so much money at such a high LTV (86%) as it will prepare for the next crisis where their misjudgement will cause grief to those who are saving (including yourself)

I would advice:
stay where you are - continue to reduce your mortgage and increase your equity.

if you have sold, you counted your eggs before they hatched, i would recommend trying to move in with your parents until you can save up some more, as rent will just kill your chances to get back into the property ladder anytime soon.

hells030780

Thanks for the feedback, we have paid the mortgage quite happily for the last 6 years, moving in with parents is not an option.... at 34 with a child it is totally not plausible! We sold as we were given some "duff" information from our current lender a few months back

HiToAll

That does sound like a low LTV for getting anything like a rate which would enable you to pay roughly the same as you are paying at the minute. We have looked at 75% LTV mortgages and they are in the low 3%,so with an 86% LTV you would be looking at closer (if not over) 4%. Could you afford to pay closer to £700/month.

Looking at the figures you have provided, even if the mortgage company take your tax credits into consideration you still would not pass the affordability criteria from what I can see.
Save up more and pay down your current mortgage

BitterAndTwisted

If you haven't exchanged then just pull out of the sale.

The difference between now and when you first got the mortgage was obviously your father's income, which you don't have now.

People claiming tax-credits generally can't afford the responsibilities being a home-owner entails. One or both of you needs to increase your income substantially before you apply for another mortgage.