Advice on where to go from here?

Chocolate_Teapot

Hi I'm wondering if anyone can give me some advice please?
My husband is self employed with a low income, I don't work because I have a condition called fibromyalgia and I'm afraid that I probably would end up phoning in sick more times than actually being there. We have 3 children and we receive Tax credits and child benefit to boost our income. Last November we sold our home as we outgrew it and paid off our debt management plan and made £30k equity. We then moved into renting with a plan to increasing my husbands income and to get another mortgage. However after speaking to a mortgage advisor at Barclays they told us we had to have 3 years accounts of high wages and be 3 years clear of paying off our debt management plan. We feel a bit deflated now as we thought that maybe a year or so we could have a mortgage again. We have considered to keep renting but I'm worried how we will be able to afford to pay the rent when my husband retires, he's 50 next year.



So should I keep looking for mortgages or just stay in rented accomadation? We have been silly with debt in the past but we are now a lot more smarter at handling our money and budgeting, so really the debt management as learned us a valuable lesson.



TIA:)

sal_III

Speak to a mortgage broker, who will be able to pick a Lender suitable to your circumstances.

Chocolate_Teapot

The previous house was a 2 bedroom with 3 children. One being a boy, so wasn't ideal and we had to move as the oldest girl is 17. The money is tied up in 2 ISA's and we know we can't touch it as it's for our next home. We've not dipped into it and nor do I want to. But, I totally understand where you're coming from. It's actually quite nice to sit on a little nest egg.



I am desperate for my own home, nothing wrong with rented but I feel that this home isn't mine. I'm not in love with it and I really want something to call my own again.


I will look into a mortgage broker. we previously bought our home off the council and at the time we were able just to buy it off them and go to a bank and get a mortgage. I didn't expect it to be a walk in the park this time but I thought less than 3 years.

Sedge123

You mention that you!!!8217;ll struggle to pay rent when your husband retires, will you be able to pay a mortgage? I think you will struggle to get a mortgage now and social housing would (I assume) not be possible with that much cash on the bank. Bit of a catch 22.

Chocolate_Teapot

We were thinking of taking out an 18 year mortgage until retirement age and then hopefully be mortgage free. Well that's how it's happening in my head but we all know things like this don't go to plan.



I would ideally like just another 3 bedroom. The size of this rented one is perfect and the girls are used to sharing. I don't want a mansion just something that will fit us all in. Just something to call my own and I can put pictures up without worrying what the landlord will think. My husbands wage hasnt been great over the last 2 years, thanks to the economy its been a very low wage. However he has just got a contract which will enable us to fetch more money home and will reduce the amount of benefits we get:j We were thinking of getting at 100-110k mortgage. House prices are reasonable around here fortunately.

maisie_cat

If you do not buy another property with the proceeds of your house quickly I'm pretty sure that you lose entitlement to some means tested benefits. I think it's 6 months or so that the proceeds are disallowed for but I could be wrong. Have you declared it?

HampshireH

Social housing will be out of the question yes.

Capitalising on a 2nd right to buy property is some kinda madness i cant quite fathom yet. Morally its beyond me but in practice you wouldnt have a RTB discount anywhere near the old protected assured RTB historically given.

The point is moot because your (based on what you have said) not eligible for social housing.

Its usually 16k in savings and various needs to get on the list.....then you wait.

I would go to a good broker. Ask around gets some recomendations and go from there. You may be pleasently surprised but 3 years seems to be quite standard for self employed accounts and mortgages.

You could perhaps considered shared ownership (borrowing less). I'm not wholly sure what would be required.

Sadly the longer it is left, the older you get, the smaller the pool of lenders with larger sums of cash available will be

AdrianC

Chocolate_Teapot wrote: »

The previous house was a 2 bedroom with 3 children. One being a boy, so wasn't ideal and we had to move as the oldest girl is 17.

That would fail statutory overcrowding tests...


If the oldest is 17, will she be off to Uni within the next year? What age are they other two?


Given that it's very unlikely you're going to be getting a mortgage in the short term, I think I'd be tempted to stick it out in rented until the family home contains fewer people, then downsize and buy in one go.

As far as rent when you're retired is concerned, if you find yourself in dire straights, the benefit system will step in. That's a safety net that isn't there if you're a home owner in the same way - you're also protected from property maintenance costs.

Chocolate_Teapot

We get tax credits and child benefit. When I phoned tax credits they said you could have savings and they take the interest that we get away from their payments (sorry if this isn't making sense, I have brain fog today) we don't get any other benefits.



Our credit score has gone up loads which I'm pleased to report. Maybe another 6 months and it will be even better.


I'm just in the processing of looking at mortgage brokers in my area, I'm also looking at shared ownership as this may be better for us and then we can hopefully staircase and buy more. There are a few shared ownership houses but they start at 160k! I really don't want to go that high in price as it seems so expensive and I don't want to go back into debt by having a high mortgage.

I think if we rented it would always be private rented, I realise we wouldn't be eligible for a council house. If we don't get a mortgage would we be eligible for help if we get into dire straights?



My other 2 children are 11 and 7. The 17 year old has no intention of moving anywhere, so she says, I think she knows how easy she's got it with her mum and dad!

I really do appreciate everyones input, thank you.