Been 5 years and still no closer :(

Beatles4

Hi there,

Looking for advice.

I am self employed and partner works part time due to childcare etc

5 years ago the bank and other mortgage brokers were only offering upto 80k but seeing as that wasn't enough to buy the house we was looking at (was a house for first time buyers at 120k) and no houses round here go for 80k unless they need 40k - 50k plus work on them the bank instead offered us right to buy our flat we declined as wanted bigger space.

Having spent money on this place in last 5 yesrs as you expect,  now we are thinking of buying this flat, we went to the bank now they refused us for a mortgage.

They saying stuff like they reckon we can't afford a mortgage cause of interest rates so they would of offered us one 5 years ago but now as interest gone up they can't and best wait a few years till market settles!
Surely that's same for anyone ever?

Also because we pay alot for childcare but if we didn't pay that my partner couldn't work so it's a viscous cycle.

And being self employed it's difficult I've never been so busy much busier then 5 years ago but we had covid which wasn't my fault but effected every business up n down the country.


Will I ever get a mortgage? A house of my own?

Danieljw90

don't go to the bank! in your circumstance its probably worth speaking to a broker to see exactly what you could get. 

every lender on the market has a boundary (salary x 4.5 / 5.5 etc) 

unfortunately childcare is taken into consideration as its still an outgoing so they will add up everything you have coming in then detract your outgoings to come up with a figure if its under what the lender is willing to loan you will get a straight decline. 

interest rates from my personal experience do matter as well, a bank will figure out your rough monthly mortgage payment on the property depending on your LTV and deduct that from future outgoings 

fergie_

5 years ago was pre-covid and now there is a recession / cost of living crisis on the horizon - everything here will be making the banks twitchy. 

Good advice to speak to a whole of market broker, but ultimately is there anything you can do to help with childcare costs?

K_S

@beatles4 

General affordability (as per lender calculators) has tightened considerably over the past year due to inflation, higher interest rates, etc. Childcare costs can be a significant drag simply due to their size, and especially if they are significant in relation to the income. Plus you are self-employed which makes it more complicated.

Even so, there are actually more products now than before covid that allow FTBs to borrow higher income multiples than they normal can expect. So you may well have options.

What I would suggest you consider doing is speaking to a whole of market broker to get a realistic idea of your maximum borrowing figure so you can decide whether to go ahead and look or not. 

You could start off with a broker on the MSE list here and (if they can't help) then other experienced brokers.
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

 Beatles4 said:

Hi there,

Looking for advice.

I am self employed and partner works part time due to childcare etc

5 years ago the bank and other mortgage brokers were only offering upto 80k but seeing as that wasn't enough to buy the house we was looking at (was a house for first time buyers at 120k) and no houses round here go for 80k unless they need 40k - 50k plus work on them the bank instead offered us right to buy our flat we declined as wanted bigger space.

Having spent money on this place in last 5 yesrs as you expect,  now we are thinking of buying this flat, we went to the bank now they refused us for a mortgage.

They saying stuff like they reckon we can't afford a mortgage cause of interest rates so they would of offered us one 5 years ago but now as interest gone up they can't and best wait a few years till market settles!
Surely that's same for anyone ever?

Also because we pay alot for childcare but if we didn't pay that my partner couldn't work so it's a viscous cycle.

And being self employed it's difficult I've never been so busy much busier then 5 years ago but we had covid which wasn't my fault but effected every business up n down the country.


Will I ever get a mortgage? A house of my own?

MrCarrot

As others said above, go to a broker, especially if you are self employed.

I have wasted countless days in the past applying for remortgages to try and secure the very best rate, only to be turned down by the bank for the flimsiest of excuses.  I also have my own business and unfortunately from an accounting point of view you can't make yourself look poor to the tax man and rich to the bank at the same time.

A broker is much more likely to know what will and what won't be accepted.  Some of them also have access to speak to someone at the bank to query things which ordinarily you wouldn't be able to do yourself, and this can save a lot of wasted time.

simon_or

I'm repeating what people have already said, this is one for a broker. Going from bank to bank is completely pointless.

snowqueen555

I've been saving for 8 years, and I was probably better off 5 years ago. It is really hard at the moment, the high interest rates are needed to reduce inflation, but it is really hurting FTB.

I think as others have said you should speak to a broker they will be able to give you a quick response.

Beatles4

Thanks everyone will look at speaking to a broker.