Big deposit but low (accepted) salary - is a mortgage possible?

Caitien

Hi all,

My partner and I are in the situation that we have a sizeable deposit due to inheritance but I have a salary of around 22,000 (possible set to rise soon but not sure yet) but he is a postgraduate student. He has a tax free and fairly generous stipend which combined makes our living comfortable and would in practice make a mortgage easily affordable for us. The problem is that his stipend would not count for normal mortgage affordability checks. It is guaranteed for another two years.

I have seen on one t&cs (can't remember where but possibly Halifax) that up to 60% of a fixed term stipend income may be considered as part of salary, so there is some hope there.

In our current city (where we would like to stay for now) house prices are tremendously high and rising quickly and so although our deposit feels huge for many areas (between 175-195k) here we would still need a mortgage, but for our target house price of c. 300,000, this could be around 40% LTV.

I have read through the Mortgage Guide (very useful) but I still can't quite work out whether our situation would allow us to access a mortgage...if they do only consider my 22,000 salary this could be difficult even if only wanting a 40% LTV?

The other option of course is to wait until he finishes his studies, but there is no guarantees he will be seeking or finding permanent contract any time soon (probably pursuing academia which at this stage of career will be temporary contracts).

Many thanks for any advice

Cait.

pennyprincess

Cait...you need to find a specialist broker who will know the market. As far as I am aware some smaller building societies and European Banks will count stipends. My friend got one through a Swedish Bank for a new build .

Verix

There are lenders who can consider the stipend (Halifax being one) but if there was ever a case for consulting a patient broker, this would be it! Did some research in to this a couple of months ago and your available pool of lenders would be pretty shallow.

nkkingston

Our broker told us there were about 12 who consider some or all of my partner's PhD stipend. We've gone with Halifax.

seabass90

Caitien wrote: »

Hi all,

My partner and I are in the situation that we have a sizeable deposit due to inheritance but I have a salary of around 22,000 (possible set to rise soon but not sure yet) but he is a postgraduate student. He has a tax free and fairly generous stipend which combined makes our living comfortable and would in practice make a mortgage easily affordable for us. The problem is that his stipend would not count for normal mortgage affordability checks. It is guaranteed for another two years.

I have seen on one t&cs (can't remember where but possibly Halifax) that up to 60% of a fixed term stipend income may be considered as part of salary, so there is some hope there.

In our current city (where we would like to stay for now) house prices are tremendously high and rising quickly and so although our deposit feels huge for many areas (between 175-195k) here we would still need a mortgage, but for our target house price of c. 300,000, this could be around 40% LTV.


I have read through the Mortgage Guide (very useful) but I still can't quite work out whether our situation would allow us to access a mortgage...if they do only consider my 22,000 salary this could be difficult even if only wanting a 40% LTV?

The other option of course is to wait until he finishes his studies, but there is no guarantees he will be seeking or finding permanent contract any time soon (probably pursuing academia which at this stage of career will be temporary contracts).

Many thanks for any advice

Cait.

It will all come down to affordability - I'm a single first time buyer with a similar salary to you. I've got quite a chunky deposit - not as much as yours, but my LTV is still pretty good at around 67%. I got my agreement in principle easily and am feeling relatively confident my full mortgage application will go through ok! My mortgage payments will be around £320 a month so as you can imagine, I will be able to quite easily live on my salary of around 22k. For you, it will be about showing the banks that your monthly salary is enough to support you, your partner and your mortgage payments comfortably.