Mortgage 'In Principal' - Low Income Family

kay159

Could anyone advise the best companies to use to gain a provisional lending figure for my daughter and her partner who are looking to purchase their first house
They have visited a local independent financial advisor who are dragging their heels on figures and are now out of the office until midweek and houses are selling pretty quickly in their price bracket
They live in a low cost housing area in the Dearne Valley, South Yorkshire
My daughter is currently completing a degree and has a small child. She has DLA (PIP) and Tax Credits and her partner is on a low income of £15k. We have been told that my daughters income will be added to her partners for calculation purposes (excluding any student finance)
House in our area are under £100k and they are currently paying rent of £450 which a rent increase due in March hence wanting to move into their own property
They have a 5% deposit
If they run through the online process with one of the major banks would this detract from their credit rating and make a formal application more difficult - the mortgage advisor said not
They desperately need to know if this is a viable proposition as the lease on the property has to be resigned in the next couple of weeks and they have the possibility to move to a 2 month rolling lease from a 6 month lease if know a move is imminent
Any advice would be gratefully received

Timbosaurus

Unfortunately, most banks will see that as one income of £15k to support one earner plus two dependents. Even if you can get around this, I know from personal experience that on low incomes it is particularly hard to get high loan-to-value ratios. I managed 90% on a property worth £34k by the skin of my teeth, with no dependants. You'd be vanishingly lucky to do any better, I'm afraid.

ap1985

I personally think it may be difficult to secure a mortgage on such a low income with a low deposit due to affordability. Buying a house comes with additional costs which you need to bare in mind in addition to just paying the mortgage.
However, if you are looking for more professional advice, I would recommend speaking to another mortgage broker and getting their thoughts.

ACG

Im not sure about the DLA income, you may struggle to get that taken in to account. The tax credits could likely be used but it depends on the details, some lenders only accept 50% of them.

But you do not need to do a DIP to see how much you can lend, you can use the lenders affordability calculators. No credit check is done at that point and so it will not affect their credit scores. Just be careful, the results are only as good as the information entered, so just check what income the lenders will allow.

As has been said, unless the tax credits are at least £10k p.a if not £15k, I think you may struggle to get a £95k mortgage.