Sole applicant on a low income

Cash-Strapped.T32

Sole applicant, low income - What could possibly go wrong?
I'd really appreciate some advice please, I'm fretting over how my affordability will be judged as a sole applicant.  The chance is coming up to buy the rental house I live in with my girlfriend, we’re expecting this to happen within the year with or without us.  We're both FTB.  We both work, but unfortunately we think the mortgage will have to be in my sole name.
We’re ok with this as a couple, but I worry about whether I’ll struggle to get a suitable mortgage based on my sole income. Obviously if things were different it would be relatively easier if we were being judged on our combined incomes but we all work with what we've got

I expect the asking price to be around 128k-138k based on prices around here and how much I know the LL paid for the property.
The LL is lovely (not important to this but worth saying) and has offered us first dibs so to speak, but we have to be realistic and appreciate that the LL's job is to look after his family with his asset, and so assume the asking price will be a realistic market rate in a year's time.  I appreciate how uncertain things are at the moment, but I’m just going with the best estimate I can come up with so I'll have to work with a range of possible asking prices, and we won't know until next year how things will play out in the housing market.

Here’s the bit that worries me though. My salary is only 21k.

I expect to have a deposit of 15% by the time I need it, perhaps even 20% if the asking price is on the lower end of the likely range.
Apologies in advance for the geek-tables, but I put together a few sums to help me work out what I'm looking for based on a possible range of asking prices, with a figure for my total deposit of 25k (combination of personal savings and LISA). I may be able to push this a tiny bit higher depending on how much more I can save but I am going with a safe estimate.

This tells me that pretty much whatever the asking price ends up being, I'll need a salary multiplier of 5 or 5.5.
Is that even possible for someone on a wage like mine? For the area it isn't even that bad a wage - nothing spectacular but am I just completely barking up the wrong tree here?

Thanks for any advice you can give, and sorry for rattling on so long for what I realise now is a pretty short question.

MovingForwards

Why sole application? What makes you think you won't get a joint mortgage as you could do with the extra income to secure the amount you need.

Thrugelmir

Is your partner contributing to the deposit?

haras_n0sirrah

Speak to a broker. Some of us who post here are independent brokers. We are not allowed to approach you but you can approach us - we are identifiable by our signatures.
What is on the credit file which is preventing a joint application?
As Thrugelmir says is the deposit coming from a joint source?
You are looking as a rule of thumb of 4.5x salary. If the house is 128k - 20% - mortgage needed of £102400 / 21k = 4.87k
so you are likely to be slightly short - max loan probably around 94k so you would need a deposit of around 34k if on your own. 
With a 20% deposit it may well be possible to make it joint depending on how adverse we are talking.

HummingBird76

What is the reason that you have decided it is best to get a solo mortgage?  Surely if both of you are working, it makes a lot more sense to get a joint mortgage?  

Cash-Strapped.T32

Both good questions -  I admit I'd left the details of the why out, simply because it's personal rather than financial, but in fairness if I'm asking advice it's fair to explain why...
Sorry I had written out a much more detailed post but I lost it between the office and home so I'll do my best... 

@Thrugelmir   No, she won't be contributing to the deposit, everything going into the purchase will be on me.
We both understand the house will be mine and what that means. She is rather gutted that she can't be "in on it" with me, much more than I can give credit to in a written post.  However it being the case that she's unable to contribute, she's therefore adamant that she doesn't want to be on the mortgage as it would be unfair (in her words) otherwise.  She's actually more adamant than I am on keeping it solely my name and keeping it that way afterwards. It bothers her because it's such a major endeavor I'm doing rather than a fear of not having ownership of the house (if you met her you'd understand! ). 
Additionally and a bit uniquely, in a few years her family will be handing down a small property to her that has been in the family for years. We agreed years ago between us that if/when we marry we'd put something on paper so in the worst case/etc I wouldn't claim it as we always considered it hers, even if someday we both lived there.
We'd likely do something similar here, or just arrange our finances such that I pay all the mortgage payment and she pays correspondingly more to other expenses each month so that we both feel it's fair between us, or some combination thereof.

Sorry, a bit of a long-winded explanation there, but just to make sure everyone understands we're dealing like grownups (as much as possible I hope) with the situation of one person owning the house we both live in.

@MovingForwards The reason she's not able to contribute is because she is carrying a lot of historic unsecured debt, and over time, servicing it has become increasingly expensive, leaving her little disposable income.  Lockdown has shown that to be *very* little.
In fairness she should have been on a debt management arrangement of some sort before now.  We'd had a vague plan of tackling the debt at the beginning of this year, in anticipation of the house coming up eventually and then.... well, you know the rest...
Servicing her debt has become so expensive that even a 20% drop in income during furlough leaves her with literally nothing left over after expenses (and expenses have been minimal during lock-down), and even if a lender were willing to pass her on affordability, we don't think it would be the right move, reading up on the debt-free board would be her best move currently.

So that's her situation. Apologies if I made it all sound very dry & cold - we're anything but!
Anyway - given the situation outlined above, she's not in a position to buy for a few years.
However I am, and the house we both love is coming up for sale sooner than we expected.
Our personal circumstances are such that one of us owning this house over the other doesn't cause any real imbalance in the relationship even if we were that bothered personally, which we aren't. 

So in both our minds, the solution to our situation is for me to go for the mortgage, and that brings me to the start where I worry if I'm going to be attractive enough to lenders coming at them solo.

MovingForwards

I thought it would be debt related and does make sense, especially if she is struggling to pay them and live.

Quicker she starts her debt free walk, quicker it ends and the history starts becoming a distant memory. Send her to the debt free board as the members are very helpful 😊

Cash-Strapped.T32

haras_n0sirrah said:

Speak to a broker. Some of us who post here are independent brokers. We are not allowed to approach you but you can approach us - we are identifiable by our signatures.
What is on the credit file which is preventing a joint application?
As Thrugelmir says is the deposit coming from a joint source?
You are looking as a rule of thumb of 4.5x salary. If the house is 128k - 20% - mortgage needed of £102400 / 21k = 4.87k
so you are likely to be slightly short - max loan probably around 94k so you would need a deposit of around 34k if on your own. 
With a 20% deposit it may well be possible to make it joint depending on how adverse we are talking.

Thanks - Apologies for the double-post and not picking up on your reply (and hummingbird76) earlier.
I appreciate what you say about sending a PM. In honesty I thought that almost a year away from the time of sale would be too soon to pester any individual with any specific issues, but thanks I'll do that.

In answer to your direct questions, I'm the sole source of deposit.
The issue isn't her credit history as such (although it isn't fantastic), but the fact she should be doing something about her debt, as it leaves so little disposable income.  We probably share the blame for not sorting this sooner, we had vague notions of keeping our options open re; joint mortgages if this place ever came up which I'm sure didn't help either of us pick our feet up. 
On the other hand, I'm debt free, and am able (if push came to shove) to afford to run the house by myself if need be (which we don't foresee being the case of course).

So taking what you say on board, I feared that the amount I would need to borrow would likely scupper me on a solo attempt with the estimated values at the moment, which are as realistic as I can make them at the moment.
Ok, that's not the answer I was hoping for, but it means at least I know I've got the change the plan as it currently stands. Back to the drawing board perhaps!

Thrugelmir

Cash-Strapped.T32 said:

haras_n0sirrah said:

Speak to a broker. Some of us who post here are independent brokers. We are not allowed to approach you but you can approach us - we are identifiable by our signatures.
What is on the credit file which is preventing a joint application?
As Thrugelmir says is the deposit coming from a joint source?
You are looking as a rule of thumb of 4.5x salary. If the house is 128k - 20% - mortgage needed of £102400 / 21k = 4.87k
so you are likely to be slightly short - max loan probably around 94k so you would need a deposit of around 34k if on your own. 
With a 20% deposit it may well be possible to make it joint depending on how adverse we are talking.

The issue isn't her credit history as such (although it isn't fantastic), but the fact she should be doing something about her debt, as it leaves so little disposable income.  

Then her credit rating will be extremely poor. For the benefit of both of you. Tackle this head on. 

Cash-Strapped.T32

I agree, and with the seriousness it needs taking.
We have had some in-depth discussions on how this debt needs dealing with, and a debt management arrangement of some kind is the way forward.  The credit file hit is worth taking.  That will be happening in the very near future regardless of what happens with this house. The debt isn't huge, just expensive and it will take a while to work down. But it will happen.
But if I were able to be paying the same money I pay in rent into mortgage payments, while that is happening, that would be great.
Hence why I'm suddenly very interested in knowing if a sole application is a realistic option.