Mortgage for a FTB with a big deposit, but pitiful pay packet

Dave_Ham

Whilst I agree typically 5 times the income is the limit, there are lenders that subject to credit score can offer higher than this.

I still doubt it will stretch to these numbers though..

I would be questioning if there is no-one who can be added, they do not necessarily have to reside there.

Alternatively, do you have any other income than that listed - any overtime, bonus, commission, self employed income as the smallest annual amount could potentially drag up the amount required...?

alberty

I have a good credit score (never been in debt, fortunately), I could ask for a cash alternative to be paid instead of my 10% pension if that makes the numbers look better, but not having a pension plan might make it harder to get approval..

I haven't considered adding anyone else on, noone else in my family is working age.

Dave_Ham

This is a bit too detailed to tell from the information provided.

I would be having a chat with a broker to ascertain the exact position, so you do not amend something and do not achieve what you want/need.

holly_hobby

You also need to be aware in adding a 2nd name, that if their income is reqd, the max term will be based on the age of the oldest applicant, and they will be jointly and severaly liable for the mge debt.

It will also be exposed to their creditors (although this will be limited to their equivilent legal share, ie 50% under joint tenancy, or an alternative agreed amount under tenancy in common).

Moreover, with regards to DWP and qualification for means tested benefits, they will have to declare they are a legal owner of the property, which will be included in any financial assessment (inc any application for state funded long term care).

Whilst (as this will not be their primary residence), there will be CGT issues for them on disposal OR later release from the deeds (ie removing their interest and leaving you on), with additional possible SDLT exposure if the property is mortgaged at that time, and the effective transferred mge debt exceeds nil rate SDLT exemption (currently 125k).

So whilst there are sketchy solutions, this needs thorough examination by an experienced pracitioner (if you engage a hybrid IFA they can address both the mge placement & any protection requirements, plus tax and will issues simultaneously).

Which includes IHT and estate planning for the owner(s), when looking at the property value on its own (esp if unencumbered at the time), may present some issues depending on the owners & the value of their net estate on death - which I won't go into here, but your IFA/tax practioner will discuss.

Hope this helps

Holly

Mirno

At 5% (not an unreasonable number in a year or two's time even with your LTV) your mortgage payments would be just over the £1000 per month.
As you're buying a fairly decent house, your council tax will likely be £150 or so a month.
Given your take home pay - that puts you on ~£750 a month for food, travel, clothes, insurance, gas & electricity, pension contributions, and a rainy day fund for when the boiler packs in.
While it's not impossible, it doesn't leave a lot of room, and that 5% interest rate may turn into 10% at some point during the 25 years.

The reason the banks are saying it's unaffordable is because it probably is unfortunately.

There are plenty of parts of London that are, while not good, certainly not bad either. These places can be a lot cheaper than £450k - it depends on what you're willing to live without of course.

Mirno