Is it possible to get a mortgage with two children?

lilsweetie

Hi all

Me and my partner are 30 years old, he currently works and earns just shy of £20,000 per annum, I am not currently working however will looking to work part time in a few months when my baby is over six months of age.
Bit of background, we had our first child at 25 and moved into a rented property through a housing association, from there we saved and saved and I went to work part time to save for a deposit for a house, we had saved £27,000 and looked for houses, due to the school location I wanted for my child we only had the catchment area to look in, after a year we still didn't find anything so we put in to buy the home we live in. When the valuation came through, I found out I was pregnant, although shocked I ideally did in a few years want a second child, unfortunately I lost the baby at 23 weeks, and for reasons I won't go into the consultants findings but he told me if I wanted another baby not to hesitate as with age, comes chance of it happening again. House buying went onto the back burner as I battled anxiety and depression, blaming myself, and put all my effort into getting pregnant again, I did and all went well, I now have a three month old baby. Now our family is complete, my mind is now back focused on the mortgage, we have just short of £23,000 now due to having to buy a bigger car (we had a tiny Clio and couldn't get babys car seat in it without real struggle!!) and bits baby needed.
My partner is actually trying to move up at work, he has a meeting today with his manager about it.
All I see online is how hard it is to get a mortgage with children, it's getting me so down, all I've wanted for years and years is to get a mortgage and be able to make a house my own and leave something good for my children, I have not redecorated my rented property since moving in , I feel like I'm wasting money on a home that's not mine, we have phone contracts that costs less than a top up voucher, I always ensure our energy etc is lowest it can be, our money is in a HTB ISA each of us, with the maximum allowed in since they started them, so nearly £7000 in each, good interest rate of 3.5% and rest is in a high interest savings account. Houses round here roughly are between £70 - £90,000. We can still buy the house we live in as well, but obviously I need to go back to work first.
Am I wasting my time now I've had my children first or is this possible? It's making me upset everyday when I should be enjoying my baby instead. I just hate renting, I feel it's dead money.

Any advice, thanks x

ACG

It would come down to affordability. I would imagine a £70-90k property with your deposit should be possible based on your partners income but you need to check some affordability calculators or speak to a broker.

But the only potential issue is affordability. Lenders can not discriminate against people with children when it comes to getting a Mortgage. People all the time get mortgages who have children, I have done a Mortgage before now with a couple who have 5 between them.

spadoosh

Id imagine theres more people with mortgages and children than just mortgages.

Youre biggest barrier will be the single income, which will limit how much you can borrow. Beyond that as above, if a bank thinks you can afford a mortgage theyll lend you money, if they dont, they wont.

It shouldnt be overly difficult for you to get a ball park figure.

Look at the type of property you want in the areas you want, that is sold prices as opposed to listed prices. Take your deposit from those selling prices and thatll show how much mortgage you need.

Put your details in to the many online calculators and it should give some indication as to its affordabillity. Ive always found it god to be on the conservative side of realistic. Ie always assume your costs will be more and your income will be less/stagnant. Try to work on worst case scenarios. Last thing you want to do is rush in when its not affordable and get set back further than if you had waited.

Beardmidget

Firstly, you don’t sound silly to me at all. Your partner sounds like he has a steady job and you have the capacity to work when the smallest child is bigger and goes to school. Sorry to hear about the one you lost, I can’t imagine how heartbreaking that must have been.

Your children aren’t, directly, the problem.
We have three children, and I’ve never found that they create a problem per se, but that the cost of childcare does have an impact on affordability.

We spend over £1500 per month on it, so obviously that eats up a lot of our ‘disposable’ income. Banks now perform a stress test on applicants to see what would happen if their repayment went up a lot because of interest rates rising to something like 12% (which is unlikely).

In your situation, it sounds like you probably don’t have any paid-for childcare and you are doing it all while your partner works? That may very well improve your affordability relative to our situation where my wofe’s Income is almost entirely swallowed up by the childcare. One thing you could do if you’re married is that you can transfer some of your tax free allowance to your partner and he will save a bit of income tax.

Best advice is to go to see a nice friendly broker who will give you an idea of what you can get and will also help to get your application past the banks hurdles.

TBagpuss

The issue with having children is that the lenders look at affordability, so (in effect) take into account the fact that children cost money. On the mortgage application you will be asked about your financial commitments, which would include the cost of child care, as well as things such as any regular loan repayments etc.

At the moment, because you are not in paid work, your household has a single income, and 3 dependent.

Putting those details into nationwide's online calculator (i.e. applying as joint applicants, one person having £20,000 income per year and the other nothing, and with 2 children), suggests they might lend up to £60K. Obviously if you do pay for child care or have other existing financial commitments that would change, as it would if/when you start to earn again, but it suggests that with the figures you gave for your savings and local house prices, getting a mortgage in the near future should be do-able.

It would make sense for you to talk to a mortgage broker to get a better idea based on your specific circumstances. Some lenders will take into account child tax credit / working tax credit (or the element of Universal credit which replaces them) as part of your joint income, for instance, and your mortgage broker should know which ones.

Also, given the figures you mentioned, it sounds as though you would be able to put down a deposit of at least 20%, which is good.

If you have clear plans about returning to work and an idea of what your child care costs are likely to be, use https://www.entitledto.co.uk to work out what level of tax/universal credit you are likely to qualify for, and then go and talk to a mortgage broker, who will be able to look at what your financial position is now, and what it will be once you go back to paid work, and give you an idea of your mortgage options.

MoneyGeoff

You are currently paying rent and at the same time have saved up £23K so provided your mortgage is payment is similar to your current rent payment then logically you must be able to afford it.

A deposit of £20K on a £90K house with a 3 year fixed mortgage at £1.79% would cost £289 per month.

What is your current rent?

notanotherknot

Congratulations on your rainbow baby


We're in a very similar situation to you. Currently buying a house for £90k which we have put a 15% deposit down on. Our combined earnings of £51k have allowed us to get a mortgage easily, taking into account two lots of private nursery fees at £1300 per month. What we didn't allow for and shocked us was the insurances, which are a lot more than we bargained for!


Natwest are currently the best when it comes to those with families (we went through a broker but you could try direct for advice? ), they don't ask for specific figures relating to childcare costs and look at the office of national statistics instead. This allowed us to get a mortgage no problem.

cloo

I'd get a good mortgage advisor if I were you, ask around for recommendations. It's not impossible to get a mortgage when you have kids, but finding someone who can tell you what to do is better than worrying about what the internet says you can't do.

xylophone

Perhaps focus on your baby for the next few months, get the part time job and then explore your mortgage position at the end of the year?

You can continue to save in your HTB accounts and other accounts (make sure that you have optimised your current account position).

https://www.moneysavingexpert.com/banking/compare-best-bank-accounts

Have you checked on child tax credits/help with childcare?

https://www.gov.uk/help-with-childcare-costs/tax-free-childcare

teddysmum

My son and his wife, who had two children easily got a mortgage, but it was suggested that number three on the way should not be mentioned. However, my daughter-in-law went straight back to working full time after maternity leave.


Neither baby suffered from going to nursery. In fact the younger one was noticeably socially ahead of her one day younger cousin, until she too went to nursery and accelerated her development.

AdrianC

Your problem is not due to having children.
Your problem is a simple mathematical one - lots going out and not much coming in.

Sorry if this sounds harsh, but simple bald facts often can - your partner does not earn that much above minimum wage, and is feeding four mouths on it. That is not leaving much spare. When a second income starts coming in, that will bring increased childcare costs with it.

A £60k mortgage isn't a large one, and is only 3x your annual household income (excluding any in-work benefits), but your monthly disposable income is not high.