FTB - will we actually be lent any money?

Strummer22

Hi everyone

My wife and I will be looking to buy our first home by around spring 2017. Here's how I see our financial situation at that point:

A deposit of around 40k
Expected value of property around 100k
My salary around 27k
Wife around 3-4k (part time while studying)
Both have good credit history

Crucially, our outgoings will be high because, erm, we own a horse. The horse actually forms part of our financial future, as she will be used to provide animal assisted therapy and earn my wife a salary of over 10k once her studies are finished, and that too is part time.

So, our monthly outgoings look like being £1250 before the mortgage, with after-tax income of about £1900. Since we're only borrowing 60k and are willing to take a long mortgage term, what are our chances? I ask because plugging these figures into calculators on Halifax, Post Office etc says they'll lend us a big fat zero

ACG

How much of that £1250 is horse related?

Strummer22

In the region of £250-300.

Other monthly expenses:

Bills £170
Car+fuel £100
House (insurance, TV, internet) £45
Food & household stuff £180
Mobile phones £33
Entertainment £260
Charitable giving £185 (We give to our church and a couple of charities and would like to continue this)

Plus horse costs gives around the £1250 figure above. This is all estimated, including our salaries, but is a best guess at the moment.

ACG

Im confused then...
2 adults, £27k income, 25 year term and £300 expenditure on the post office website says they will lend £80k.

I only mention the post office as you did and its the easiest one to check.

The post office do not want to know about your other costs on the calcualtor as they have taken that into account already. Some lenders do but im sure you can manage that on your own.

Upping your commitments to £485 (£300 horse and £185 charity) brings the figure down to £54k which is not a million miles out and im sure with some jigger pokery it could fit.

Just read the notes on the calculators, enter the figures correctly and as they are asked (not how you think they are asked) and im sure you will be fine. I think you will have a number of lenders who will lend what you need.

Strummer22

Thank you for your reply! Yes, my fault, I did indeed not read all of the notes on the calculator. Skim reading and skipping sections is a habit I'll have to get out of. In future all notes and T&Cs will be gone over with a fine tooth comb...

ACG

Dont worry, im guilty of the same.

Manchester-Man

Stu_N_ wrote: »

Other monthly expenses:

Bills £170
Car+fuel £100
House (insurance, TV, internet) £45
Food & household stuff £180
Mobile phones £33
Entertainment £260
Charitable giving £185 (We give to our church and a couple of charities and would like to continue this)

Wow, nice folk! :T

MEM62

If the horse will be used in connection with a business then this should be a business expense - not a personal one. However, in that case you partner becomes self-employed and a mortgage company will need to see the last two or three years business figures.

I think when the time comes you will need to see a mortgage broker.

ACG

If the business was open and it was an expense of the business it would not need to be declared as an expense, however no income from the business could be used. It would help affordability but there is no issue as it fits.

MEM62

ACG wrote: »

however no income from the business could be used.

Why not? If the applicant was deriving an income from the business there is no reason why this can not be included.

ACG

As you said in the previous post, lenders tend to need 2-3 years accounts.

If it opened up tomorrow it would at best have 1 and half years accounts which could potentially be classed as 2 years with some lenders but as they are not yet qualified that is unlikely.

But again, as its appears to not be needed it makes no difference.