mortgage advice - 1st time buyer/ ill health

moneysavinglaura

Hi,

My boyfriend and I would love to buy a house but I've not been able to because I have been battling cancer.

I'm in remission now but due to surgeries/chemos etc. cannot work full time and have been pensioned off early.

I do a few days a month with the NHS representing patients and earn £6795 per annum. My teacher's pension is £7685 per annum and I still get a little ill-health benefit.

Does anyone know if the pension would contribute to the bank's calculation for how much we can borrow? I'm guessing that the ill-health benefit would not? Is it worth including my NHS salary, or would they look at my outgoings (having discounted my pension & benefit) and conclude that I don't even have enough money to feed myself (which is not the case!)

My boyfriend earns £47,500k so would it be better to use his salary? I'm trying to figure out what price of house we can afford and it is rather confusing!! He also earnt 5k bonus last year, would they consider this?

Thanks so much for any advice you can give.

Laura

ACG

There will be lenders that will use all of your incomes. How much and which will vary from lender to lender.

I would either speak to a broker or make sure you speak to the lender before submitting to see which parts of your income they will accept and how they would want it disclosed (ie - main income, secondary income, guaranteed other etc).

alchemist.1

The mortgage lender should include your own salary and any other income (i.e. the pension). If you don't include your own income then you can be seen as a dependent, which is likely to lower the amount you can borrow.

The husband's bonus will also count towards the mortgage lenders calculation ( to what proportion depends on the lender- some use 50% of the bonus to base the calculations others slightly higher).

moneysavinglaura

Thanks! I thought the answer would be that they would disregard it!

Do most mortgages consider it do you know? Or is it 50:50?

Also, I've been a little worries that they'll take one look at my ill health benefit and think that I'm not a worthy beneficiary of a mortgage as they might think I'll die. Does that ever happen? Should I not mention the cancer?

I'm a little worried about the whole process to be honest and the last thing I want is for them to be asking me about my prognosis

ACG

The cancer should not come up. They may ask if the ill health benefit is guaranteed and maybe some documentation around it but that will be it.

Im not sure what the split it, its not something I have come across before. I do not think you will have too many problems to find a lender who will accept it.

They would not decline your application because you have/had cancer. I do not mean this the way it may read but that does not interest them, they want to ensure you can afford the mortgage. A pension and guaranteed ill health benefit has to be a million times better than an employed income that could end next week.

moneysavinglaura

Well, this is all certainly good news! I thought that I'd be totally irrelevant in the application but it appears I can contribute after all

moneysavinglaura

so to clarify, you think that banks would include my pension and/or my benefits in the income calculator? So if I input it into the MSE calculator, that'd give me a decent idea of what I could borrow?

Also, the MSE calculator doesn't consider how much deposit we have. Is it the case that you can sometimes borrow more if we have a bigger deposit?

Thanks!

ACG

If you think thats good news, you can pay my mortgage also? :P

moneysavinglaura

Lol, don't think that'll help me move out of my flat with the world's noisiest neighbours!

ACG

Generally speaking your income will support a mortgage of £x no matter what your deposit is. There are exceptions to that however.

I have not seen the MSE calcualtor so not sure. However general rule of thumb if you are under 45(ish) and you do not have mountains of debt or a football team worth of kids, you can lend between 4-5x your income.