High Deposit Low Earnings Mortgage

Danny30

Hi all,

My wife's mother recently passed away and left a house which we now have an offer on. We are looking to use this Money and to get a small mortgage to supplement another house.

The deposit after deductions including setting aside money for Stamp Duty on a new home would be £500,000. We would then need to get a mortgage of around £60,000 - £80,000 to purchase a home for around £560,000 - £580,000. The only issue is I am working part-time currently and only earning around £11,000 per year though I am looking for a full-time job and my wife is also not currently working.

I was just wondering if a £60,000 - £80,000 mortgage should be attainable in the above circumstances and does housing benefit on the bank statement affect our chances of getting approved? I know that they only normally lend 4.5 times income.

Also would a guarantor be an option?

Thanks in advance

Cynical_Monkey

Being slightly cynical, if you're earning 11k as a couple and are claiming housing benefits to help with the rent, what makes you think you can afford a mortgage?

That's essentially what the bank wants to know.

Housing benefit won't affect your chances of getting a mortgage for some lenders. The biggest challenge will be your income compared to the amount you want to borrow.

You could get a guarantor mortgage but why not consider one of the other obvious options

• Find a house for £500k and live mortgage free - Albeit with limited cash flow.

• Find a house for £450k and spend 50k retraining for another job.

• Find a house for £350k, buy a cheap rental flat outright and have the rent as an income.

Any of these options seems preferable without knowing more details.

amnblog

Housing benefit is an issue.

Your income is an issue.

You should purchase when you have the confirmed income to support the lending.

Danny30

I am in the process of seeking alternative employment and am most likely to be on a full-time role of at least £20,000 in the near future.
I worked out my finances after all expenses in this scenario and even with that income, I would be in a much better position then I am currently in. We are looking for a long term house in a particular area that we need to live in for various reasons and the houses are at least £540,000 plus.

scholesfan88

Wait until you get your full time role and salary to match.

Choccygirl123

I would do some research on the council tax, running costs etc for the house. I'd be worried you'll be asset rich and cash poor and will leave yourselves in a pickle.

foxy-stoat

What type of house are you currently living in? Maybe drop your expectations a little and live mortgage free - it must be the best feeling not to have pay out for rent or mortgage payments.

Mortgage_Adviser

Do you get any other income, Tax credits etc?
There are lenders who will take this in to consideration.