Is buying possible or sensible for us?

pedalbin

I’d welcome any advice on our situation. We have a mortgage advisor looking into options for us, but would welcome any other thoughts / ideas. It’s quite a long post but we are looking at whether buying, rather than renting, is a sensible option for us.

My husband and I are in our early 40s. We have been living in a house tied to my husbands job for 16 years and are looking to move out and for my husband to change job. We have two school age daughters.

We are both on relatively low incomes (I earn £9k for part time work that fits around school hours) and my husband is looking for a new job. Suitable properties in our area cost £250 - 300k. We have a small amount of savings that should cover the fees of buying.

Our parents are keen to help us on to the housing ladder, things that they / we are considering are:

1. Gifts that could act as a deposit (total £40k). But as my husband is currently looking for work, we wouldn’t be able to get a mortgage to cover the rest of the property price.

2. Me getting a mortgage with my dad who is in his early 70s and has an income of about £45k.
Thoughts on this would be that monthly repayments would be very high, It would impact his standard of living and I think that we would be liable to pay stamp duty as this would be an additional property for him? We could use the above gifts to pay off this mortgage (so wouldn’t have much of a deposit) for a while until we could remortgage (by which time my husband will hopefully have a a permanent job and we would b3 better prospects for a mortgage)

3. My parents are looking at equity release/lifetime mortgage (their house is mortgage free and worth approximately £550k) and gifting us a large deposit for the house and me getting a small mortgage on my income. My parents would get advice on the equity release.

Any thoughts welcome.

spadoosh

Any mortgage offer based on your income alone is going to fall quite short. Going in with your father is going to be difficult as he is nearing (read in) retirment age, there will be a few lenders that will look at him but not too common.

The equity release option is a possibility but theres a lot to think of alongside this. Things like the potential of your parents dying and a hefty tax bill for you. Things like your parents needing care and having funds to pay for such things.

I think you need to re look at this when your husband has a stable job. By building up your side of the contributions it will put you in a far more conventional and stable position. Of course if your parents are happy to take on the risk associated with the gifts its not to be dismissed but as mentioned youll need to research this fully.

How much does your husband typically earn or would be expected to earn?

Me and the OH have a joint income of about £40k and various mortgage calculators bring our top end borrowing at about £200k. So its not impossible to borrow a lot on a fairly low income and then a gifted deposit could get you the rest of the way there.

Yellow_mango

pedalbin wrote: »

I’d welcome any advice on our situation. We have a mortgage advisor looking into options for us, but would welcome any other thoughts / ideas. It’s quite a long post but we are looking at whether buying, rather than renting, is a sensible option for us.

My husband and I are in our early 40s. We have been living in a house tied to my husbands job for 16 years and are looking to move out and for my husband to change job. We have two school age daughters.

We are both on relatively low incomes (I earn £9k for part time work that fits around school hours) and my husband is looking for a new job. Suitable properties in our area cost £250 - 300k. We have a small amount of savings that should cover the fees of buying.

Our parents are keen to help us on to the housing ladder, things that they / we are considering are:

1. Gifts that could act as a deposit (total £40k). But as my husband is currently looking for work, we wouldn’t be able to get a mortgage to cover the rest of the property price.

2. Me getting a mortgage with my dad who is in his early 70s and has an income of about £45k.
Thoughts on this would be that monthly repayments would be very high, It would impact his standard of living and I think that we would be liable to pay stamp duty as this would be an additional property for him? We could use the above gifts to pay off this mortgage (so wouldn’t have much of a deposit) for a while until we could remortgage (by which time my husband will hopefully have a a permanent job and we would b3 better prospects for a mortgage)

3. My parents are looking at equity release/lifetime mortgage (their house is mortgage free and worth approximately £550k) and gifting us a large deposit for the house and me getting a small mortgage on my income. My parents would get advice on the equity release.

Any thoughts welcome.

When you say your husband is looking for a job, what exactly do you mean? Does he currently have a job? Is it secure and adequate to support a mortgage?

I wouldn't think that him voluntarily looking for a new job would necessarily be a problem in applying for a mortgage, or even something you'd need to disclose. Coming to the end of a fixed term contract, or being actually in a notice period on the other hand would be a different story.

pedalbin

spadoosh wrote: »

Any mortgage offer based on your income alone is going to fall quite short. . . . .

How much does your husband typically earn or would be expected to earn?

Me and the OH have a joint income of about £40k and various mortgage calculators bring our top end borrowing at about £200k. So its not impossible to borrow a lot on a fairly low income and then a gifted deposit could get you the rest of the way there.

Thanks for your thoughts, they’re really helpful. Husband was earning £16500 plus a three bedroom house.

pedalbin

Yellow_mango wrote: »

When you say your husband is looking for a job, what exactly do you mean? Does he currently have a job? Is it secure and adequate to support a mortgage?

I wouldn't think that him voluntarily looking for a new job would necessarily be a problem in applying for a mortgage, or even something you'd need to disclose. Coming to the end of a fixed term contract, or being actually in a notice period on the other hand would be a different story.

Thanks for that, yes, he is in a notice period and looking for work.

AnotherJoe

To answer your question briefly, I'd say "no, it's not sensible even if it's possible but I doubt it's possible"
You'll have to wait until your husband is in an job, and perhaps you can get a more higher paid one as well. And how woudl you know how much you can borrow without knowing your combined salaries ? And lastly, where would you buy ? What if his new really well paid job which make sa mortgage a breeze, is 100 miles away from where you are now?
Also your ongoing expenses must have been (still are? ) quite high since you weren't able to save anything significant whilst earning so that needs some looking at since you'd have the expense of mortage on top even if he earns more in a job without a tied house.

need_an_answer

Have I read you post right that your husband is under notice and that the job comes with a grace and favour or low rent property that you currently live in?

How long is the notice period and when do you need to vacate the property?

Is your husband looking for employment with the same benefit of housing included or effectively once the job finishes you will need to find somewhere else to live.

With this in mind and the fact that even the simplest of house moves with mortgages can take 4 months it may be that you are on a very tight timescale that will mean you need to move before it would all be completed.

Renting, is that an option?
Moving in with your parents maybe?

I think it would be very difficult to get a mortgage agreed realistically until your husband is back in stable employment for a period of time.

spadoosh

pedalbin wrote: »

Thanks for your thoughts, they’re really helpful. Husband was earning £16500 plus a three bedroom house.

If your husband has a p11d it should state the monetary value of the benefit of the accommodation. This should give you a more realistic figure of his earnings. Obviously it means nothing if your husband is unlikely to get a similar job (with or without accommodation) but its something to work off as earning potential.

For now at least youre looking towards the gifting options. As mentioned theres a lot of rules surrounding this and risks involved, youll need to fully research it (as well as your parents doing their own research) to fully understand what youre committing to.

pedalbin

need_an_answer wrote: »

Have I read you post right that your husband is under notice and that the job comes with a grace and favour or low rent property that you currently live in?

How long is the notice period and when do you need to vacate the property?

Is your husband looking for employment with the same benefit of housing included or effectively once the job finishes you will need to find somewhere else to live.

With this in mind and the fact that even the simplest of house moves with mortgages can take 4 months it may be that you are on a very tight timescale that will mean you need to move before it would all be completed.

Renting, is that an option?
Moving in with your parents maybe?

I think it would be very difficult to get a mortgage agreed realistically until your husband is back in stable employment for a period of time.

Thanks. Timing is definitely an issue, we need to move out of our current house by the end of July. He finishes work at the end of May and has been offered some temporary work.

Renting is an option as neither set of parents live in the same part of the country.

pedalbin

spadoosh wrote: »

If your husband has a p11d it should state the monetary value of the benefit of the accommodation. This should give you a more realistic figure of his earnings. Obviously it means nothing if your husband is unlikely to get a similar job (with or without accommodation) but its something to work off as earning potential.

For now at least youre looking towards the gifting options. As mentioned theres a lot of rules surrounding this and risks involved, youll need to fully research it (as well as your parents doing their own research) to fully understand what youre committing to.

Thanks. It is my understanding that the house wasn’t classed as a benefit as it was a requirement of the job to live on site.
We’ll look into the gifting options carefully. Thanks.

diggingdude

I would seriously suggest you look at rented for now