Shocked by mortgage appointment - is this right?!

silvercup

My husband and I are FTB. We have a 10% deposit (15K) gifted to us by my parents. We both have a very good credit score.

We originally saw a mortgage advisor back in March. At that time, our combined income was 40K and we had 13K of credit card debt. She told us then that we should be able to borrow 159K. However lockdown then happened so we put it on hold.

Fast forward to today when we spoke to the same advisor, hoping to get the process going again. Unfortunately I am now being made redundant but as I was only part time our income still stands at 36K. Our CC debt is now around 12K. Our budget is still healthy as husband is now working from home long term and we are saving about £200 a month in fuel. We were therefore shocked at what we were told - that we would only be able to borrow 70K. 

We did anticipate that the loss of 4K income would affect things, and of course the current situation limiting options, but not to that extent! She has told us that if we can get rid of the CC debt that it would make a difference. Moving forward I do have a new job (earning more than I did!) but will be self employed and she said that I am now classed as a dependant which makes the situation worse apparently. 

Does this sound right? Only 70K?! I've done the Barclays mortgage calculator and that suggests we could borrow 135K. Can somebody help me get my head around this?

cii4ps

Curious how you're "saving" considering you have £12K in CC debt.
At the time you didn't indicate or have the debt did you?

ACG

Mortgage broker told you how much you can get in the meeting? i normally give people an indication but wouldnt be able to confirm it dead on until I had some research. 

In any event, assuming no kids and you are under 42(ish), I have just checked with one lender and it comes back at £127,000 with £12k on credit cards. 

I wonder if the broker put it down as a single application and you as a dependent and that affected things? Who knows. 

silvercup

cii4ps said:

Curious how you're "saving" considering you have £12K in CC debt.
At the time you didn't indicate or have the debt did you?

I'm not sure what you mean? 

silvercup

ACG said:

Mortgage broker told you how much you can get in the meeting? i normally give people an indication but wouldnt be able to confirm it dead on until I had some research. 

In any event, assuming no kids and you are under 42(ish), I have just checked with one lender and it comes back at £127,000 with £12k on credit cards. 

I wonder if the broker put it down as a single application and you as a dependent and that affected things? Who knows. 

Thanks. We are both 42 actually and have one child. So I wouldn't have to be classed as a dependant then just because I will be newly self employed?

cii4ps

silvercup said:

cii4ps said:

Curious how you're "saving" considering you have £12K in CC debt.
At the time you didn't indicate or have the debt did you?

I'm not sure what you mean? 

Just curious.
When it comes to debt, I'd think more often than not (depends on your interest rates) it makes more financial sense to pay off your debt than to put it in the bank.

silvercup

cii4ps said:

silvercup said:

cii4ps said:

Curious how you're "saving" considering you have £12K in CC debt.
At the time you didn't indicate or have the debt did you?

I'm not sure what you mean? 

Just curious.
When it comes to debt, I'd think more often than not (depends on your interest rates) it makes more financial sense to pay off your debt than to put it in the bank.

I completely agree! I didn't mean we were saving it in the bank, I meant we weren't spending that money on fuel anymore and of course we are chipping away at the debt. 

Thrugelmir

silvercup said:

ACG said:

Mortgage broker told you how much you can get in the meeting? i normally give people an indication but wouldnt be able to confirm it dead on until I had some research. 

In any event, assuming no kids and you are under 42(ish), I have just checked with one lender and it comes back at £127,000 with £12k on credit cards. 

I wonder if the broker put it down as a single application and you as a dependent and that affected things? Who knows. 

Thanks. We are both 42 actually and have one child. So I wouldn't have to be classed as a dependant then just because I will be newly self employed?

With no history of income. Newly self employed is nothing more than a statement. That carries no weight with an underwriter.  

bradders1983

A 10% desposit? Are you sure you can even get a mortgage with Barclays only a 10% deposit? I am currently remortgaging with them and all the rates on their card were for 15% deposit or higher,  no idea if this has changed the last week or so though. 

ACG

silvercup said:

ACG said:

Mortgage broker told you how much you can get in the meeting? i normally give people an indication but wouldnt be able to confirm it dead on until I had some research. 

In any event, assuming no kids and you are under 42(ish), I have just checked with one lender and it comes back at £127,000 with £12k on credit cards. 

I wonder if the broker put it down as a single application and you as a dependent and that affected things? Who knows. 

Thanks. We are both 42 actually and have one child. So I wouldn't have to be classed as a dependant then just because I will be newly self employed?

I do not usually put down non working partners as a dependent, I prefer to go down the route of a joint application with no income for the second applicant. But if you are newly self employed, presumably you still have an income just not one acceptable by a lender?

With one child, it comes down to £113k. 

Im not here to have a dig at other brokers as we all have our own way of working, but I cant help but think he/she chose the lender before doing the research. This could be laziness or that they just went with the cheapest, it would be a prime example of where cheapest isnt always best. 

silvercup

ACG said:

silvercup said:

ACG said:

Mortgage broker told you how much you can get in the meeting? i normally give people an indication but wouldnt be able to confirm it dead on until I had some research. 

In any event, assuming no kids and you are under 42(ish), I have just checked with one lender and it comes back at £127,000 with £12k on credit cards. 

I wonder if the broker put it down as a single application and you as a dependent and that affected things? Who knows. 

Thanks. We are both 42 actually and have one child. So I wouldn't have to be classed as a dependant then just because I will be newly self employed?

I do not usually put down non working partners as a dependent, I prefer to go down the route of a joint application with no income for the second applicant. But if you are newly self employed, presumably you still have an income just not one acceptable by a lender?

With one child, it comes down to £113k. 

Im not here to have a dig at other brokers as we all have our own way of working, but I cant help but think he/she chose the lender before doing the research. This could be laziness or that they just went with the cheapest, it would be a prime example of where cheapest isnt always best. 

Thank you, this is very helpful. We definitely want a joint application so it's good to know we're not precluded from doing that. 

Can I also ask you, to what extent you think our debt is affecting what we could borrow? If for example the debt was 8K would it make much of a difference?