Affordability Assessments

Peaches9

Hi, Although im new to this forum, I do very often look at this site for information and discussions.
I just want to know how on earth anyone is supposed to pass an affordability assessment as it seems that this process of trying to get out of rented accommodation to make a step onto the shared ownership scheme is becoming the most awkward and difficult experience I have done. It seems to me that no matter what I do I keep getting pushed back. Seems like I’m going to be stuck paying someone else’s mortgage forever! There doesn’t seem to be enough help and advice out there, by that, I mean actual people to speak too.

Bossypants

What specific problems have you been having?

Cakeguts

The answer to all of this is to have a big deposit if you can't borrow much on a mortgage.



To save successfully for a deposit you have to save by not spending money on anything that you don't need.

Peaches9

I have a deposit, both myself and my daughter work full time and I also have a family member willing to help financially if needed. I pay £750 per month at the moment on rent. I have looked at my monthly outgoings and reduced all I’m able to.
After giving very basic information requested by the affordability assessment company, (salaries, credit card balances, overtime and other income), it appears that they can’t proceed any further. I haven’t been able to get in touch with them as yet, but will do tomorrow, as I want to know why.

Cakeguts

Do you have a lot of borrowing on credit cards or any other loans?

Peaches9

The debt I have is a total of £7000, no loans. Bank account in credit, no overdraft. The debt can be paid off with no problem if needed and still be left with a deposit. I have explained this to the affordability assessment company, but appears that it still can’t be done.

quantumlobster

I am sure that the assessors hear "we could pay our debt easily" every day.

What is stopping you paying this debt? Removing a £7K liability from your position would undoubtedly be beneficial.

It is hard to understand your position without more information. Your current rent is £750, but what's your income? Is your rent 25% of your income, or 75%?

You say you have other people contributing, but unless they're on the application, I think they're irrelevant - it's down to your income and liabilities.

Ozzuk

Have you tried using a broker? Debt (especially 7k) shouldn't really matter that much - but that totally depends on your income and predicted LTV. Banks were critiscised for giving out mortages at the drop of a hat so you can't blaime them for tightening things up, but I agree it isn't a fun process to go through.

A good broker will help though.

ACG

When you say there is nobody to speak to, have you spoken to a Mortgage broker?
Shared ownership is not my thing so I would be no help what so ever, but there are brokers out there who specialise in shared ownership or at least them on a regular enough basis to help tell you what is affordable and what needs to be done to bump it higher if it is not enough, I do that with customers on a near daily basis (our bag is more bad credit really).

kingstreet

What exactly is your issue, lender affordability or passing the Government's SO affordability calculator for the share being offered?

You will need to pass both.

Your £7k card debt is treated as a cost of £350 per month and on top of that you have service charges and the shared ownership rent to take into account too.

SO rent is typically calculated at 2.75% of the unowned share, so it isn't particularly "cheap" when compared to a mortgage rate.

whatdoyouthink...

Are you including the £750 a month as an outgoing on your affordability assessment? If so, I thought this would be something that's excluded as you won't be paying the rent once you move...