Single mum with childcare costs issues

shoegirl1982

Can anyone please help me?

I own my house with my now ex-husband, he's very kindly given me 5 years to get his name off the mortgage and has relinquished all his ownership rights over the house - perfect.

I now want to move house and take his name off so I own my new place myself. I earn £19725 per year (work 4 days) plus get £9500ish in tax credits which cover my childcare in it's entirety. I also get maintenance and CB so overall a healthy income I'm sure you all agree.

I've got about £20k of equity in my house, so even if I hold back £5000 for fees I still have a decent deposit for a new place. I'm looking to move from a house worth around £115k (that I quite happily pay the mortgage on myself and have done for 4 years) to a house worth around £75k - so a significant drop.

My problem is that my child care costs are being classed as a fixed outgoing (£578 per month) and it reduces what I can borrow from around £90-100k to about £30k and as you know, you can't buy much for that!

It is so unfair that I'm being penalised because I work and my daughter goes to nursery. Especially because I don't pay the fees myself, I'm lucky enough to get them paid by the Tax Credit system.

Have any single parents managed to get a mortgage with this problem before?

How did you get around it?

Is there anything I can do?

If I sell and rent then I'll be paying so much more than I would be on a mortgage. I've seen 2 brokers and neither have said they can help me.

kingstreet

What about maintenance payments?

Voluntary arrangements?

Mortgage_Adviser

There are some lenders that ignore childcare costs as outgoings

shoegirl1982

Maintenance is through the CMS so court agreed and won't go down. I had no idea that childcare costs are so heavily penalised and no one is willing to help!

shoegirl1982

Mortgage_Adviser wrote: »

There are some lenders that ignore childcare costs as outgoings

I know Natwest don't - but are there any others?

kingstreet

So, you have a salary, tax credits and enforced maintenance and you can't get the kind of mortgage you need and you know about NatWest?

Is there anything else?

shoegirl1982

Yep - I failed the credit score with Natwest so the 2 brokers I saw both suggested I get that up (it's at 711 on Experian so not that bad....) and then try again with Natwest (I bank with RBS and they said they might be flexible because they can see my spending history)

kingstreet

If you are failing credit score with the lender you bank with, that doesn't bode well.

What is your account conduct like? Recent unpaids or unauthorised borrowing charges? RBS Group hates these and you won't be able to go back until your account has been spotless for at least three months.

shoegirl1982

kingstreet wrote: »

If you are failing credit score with the lender you bank with, that doesn't bode well.

What is your account conduct like? Recent unpaids or unauthorised borrowing charges? RBS Group hates these and you won't be able to go back until your account has been spotless for at least three months.

I try to be good to repair my credit score. On Experian it’s gone October 528, November 671, December 711 and I keep my accounts as well managed as possible (never overdrawn or miss payments) so I’m hoping it will keep repairing. My current mortgage is with Halifax and one of the brokers advised me to go into a branch and try appeal to their better nature and see if they can do anything face to face so I’ve made an appointment but I wondered if anyone had any suggestions basically!

Thrugelmir

shoegirl1982 wrote: »

I try to be good to repair my credit score.

What else is currently impacting your credit file. Do you have historic issues on your file. Do you owe money on credit cards, car finance or other loans currently?

shoegirl1982

I took out a car loan in July, I have a credit car with £300 on it and a next account with a balance. My credit report says I’m borrowing a large amount of my available credit