Advice on getting a mortgage

jobe1972

Myself and my wife have been trying to get a mortgage . I didnt think it would be as hard as it has been but we havent been able to get one ..neither of us owe any debt at all both have good to excellent credit scores .. my wife earns 28k per year I dont work as we have children and has been cheaper for me not to work then the cost of child care..
the most we seem to get offered is around 80k for a mortgage ..our rented home is worth 190k.. now I bring to the table a discount because its a former council ownership now housing association 

on all the sites for banks seems to imply benefits get counted as income and dependents dont seem to matter but there having a big negative impact on us getting one 

K_S

@jobe1972 Quick thoughts -

- The number of dependents can matter, especially if you are looking to maximise borrowing on relatively low income

- whether or not benefits are considered (and at what %) will vary across lenders but there are a good number that will consider most of the common ones that will continue to be paid as owner occupiers

- it's not clear from your post whether you are trying to buy the house you currently rent from an HA? You could be eligible for preserved RTB (Right To Buy) if you were a council tenant in the same property when it was transferred from the council to the HA

- if it's just the one income + child-benefit for 2 children, the 80k number doesn't sound overly low

london21

Might be worth using the service of a broker.

There are free ones and paid ones also. 

They use income multiplier but also take affordability into consideration. 

jobe1972

K_S said:

@jobe1972 Quick thoughts -

- The number of dependents can matter, especially if you are looking to maximise borrowing on relatively low income

- whether or not benefits are considered (and at what %) will vary across lenders but there are a good number that will consider most of the common ones that will continue to be paid as owner occupiers

- it's not clear from your post whether you are trying to buy the house you currently rent from an HA? You could be eligible for preserved RTB (Right To Buy) if you were a council tenant in the same property when it was transferred from the council to the HA

- if it's just the one income + child-benefit for 2 children, the 80k number doesn't sound overly low

Hi have 4 children household total income of around 44k I have the preserved right to buy and would get discount of 87k but due to floor costs thats dropped to 67k also have 12k cash as a deposit ..on top of the discount plus access to another 6k cash in six months plus we save around £700 per month as we dont owe anything so deposit is ever growing...this house was a new build in 2010 but because I was forced to move from my previous council home due to redevelopment my tenancy was protected.. I guess I just see it as yes asking for around 120k mortgage but if we couldnt make the payments they would get a 200k house for their 120k...and the repayments would be no where near what rent we pay now plus the disposable we have at present 

K_S

@jobe1972 If you're looking for a 120k mortgage and can evidence income of 44k, subject to meeting lender criteria and not being overly term-limited (due to age) you *should* have options to borrow what you need on an RTB mortgage.

If you are struggling to find a suitable lender yourself, I would recommend considering approaching a mortgage broker. MSE guidance here on how to find one -
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

jobe1972

We made some enquiries today via a broker as we dont have a clue what we are doing they said they could get us one and came back with one ..if we move forward we have to pay a non refundable fee regardless if we get the mortgage or not .. that bit doesnt sit right with me as we have had agreements in principal and then failed to get a mortgage  .. so this could be the same pay them then get nowt and be hundreds out of pocket..

below is off one of the pages they sent us 

- RTB 5 Year Fixed No Fee Amount and currency of the loan to be granted: £113,000.00
Duration of the loan: 20 years This is a capital repayment mortgage subject to a variable interest rate.
This mortgage initially has a fixed rate until 31/08/2027.
Total amount to be repaid: £169,465.96
This amount is illustrative and may vary, in particular in relation with the variation of the interest rate.
Please refer to the lender for further details.
 This means you will pay back £1.50 for every £1 borrowed.

Value of the property assumed to prepare this information sheet: £279,820.00.
Maximum available loan amount relative to the value of the property: 65.00%.
The maximum theoretically possible to borrow would be £181,883.00 This loan will be secured against the property


Is all of the above normal?? as the house was valued at 190k by the housing association 

K_S

@jobe1972 If you're wary about paying an upfront non refundable broker fee, have you tried any of the fee-free brokers recommended by MSE? 

If you draw a blank there, you could ask your broker if they would take the fee on receipt of mortgage offer, or find another broker who will do that. That way you only pay a fee if they can get you an offer.

It may a bit difficult because of the low loan size (and correspondingly low procuration-fee/commission) as most brokers will need to charge a fee to make it worth their while.

I'm not entirely sure why the illustration shows a 280k value when it's 190k. But it shouldn't make any difference to the rest of the illustration as it's still well within 65% LTV.

jobe1972

Thankyou K_S I know they also get a fee from the lender if the mortgage goes though seen that in the paper work.. because this is out of my comfort zone and way above my head just feels odd

Mrs6653

I registered with a well know free broker company, and straight away got frustrated at waiting on the phone listening to an auto message telling me how busy they were. I switched to mortgage hut and was very quickly allocated a dedicated broker who has been so supportive and not at all pushy. For me it’s such a stress going through this process, especially if your case isn’t so straight forward, but the cost has been worth it for peace of mind and good communication. Each time i have had a query, the response has been really quick, rather than sitting in a call queue.