Mortgage advice needed please 🙂

wigglers

Good morning, 
I have a fairly good credit score as I'm 39+2 and since may 2023 I changed career and became a car transporter driver currently before tax I'm on around £48k a year. 
I live with my fiancée and two children she earns £14k working school hours as a cook.
And not sure if we just scrape it or what but sometimes we get some uc, maybe £500 every other month on average. 
We have £9k saved up in a Lisa because of the yearly bonus.
I am thinking perhaps we are in a position to get a mortgage now and finally stop paying someone else's. Also
We would really love a campervan
, but know if I get finance on a van now or use the deposit on anything else we will most likely never be in the same position again. 
So I am thinking we need to work on looking into a mortgage first, hoping you agree?
So currently in my name I did an Aip without current cards and remaining loan we have in our names and it still says they would be willing to lend us up to a certain amount. (Over 250k for 25 years).
I did the same Aip with our current debts, being paid off and remaining as follows :
Me - nw £215
-Lloyds   £230
M & s.     £800
And a loan which finishes in Nov currently £900 left of £10,000 which will be £465 a month payment. 
Fiancée - 
Barccard £800
Virgin card - 10,430 int free until July 26th.

It came back still saying they could potentially loan us enough for a mortgage offer. 

Is it worth looking into right now as we would like to stop renting asap obviously. Or should we at least wait until July next year when most if not all the debts will be dealt with?

I was thinking wait but as there's not much difference in the potential offers the Aip came back with I'm conflicted. 

Also this is only a high street bank, am I better off finding a local broker and going through them. 

Sorry for the astronomically long post, thankyou for the time and advice, 
Matt

MattMattMattUK

wigglers said:

Good morning, 
I have a fairly good credit score as I'm 39+2 and since may 2023 I changed career and became a car transporter driver currently before tax I'm on around £48k a year. 
I live with my fiancée and two children she earns £14k working school hours as a cook.
And not sure if we just scrape it or what but sometimes we get some uc, maybe £500 every other month on average. 
We have £9k saved up in a Lisa because of the yearly bonus.
I am thinking perhaps we are in a position to get a mortgage now and finally stop paying someone else's. Also
We would really love a campervan
, but know if I get finance on a van now or use the deposit on anything else we will most likely never be in the same position again. 
So I am thinking we need to work on looking into a mortgage first, hoping you agree?
So currently in my name I did an Aip without current cards and remaining loan we have in our names and it still says they would be willing to lend us up to a certain amount. (Over 250k for 25 years).
I did the same Aip with our current debts, being paid off and remaining as follows :
Me - nw £215
-Lloyds   £230
M & s.     £800
And a loan which finishes in Nov currently £900 left of £10,000 which will be £465 a month payment. 
Fiancée - 
Barccard £800
Virgin card - 10,430 int free until July 26th.

It came back still saying they could potentially loan us enough for a mortgage offer. 

Is it worth looking into right now as we would like to stop renting asap obviously. Or should we at least wait until July next year when most if not all the debts will be dealt with?

I was thinking wait but as there's not much difference in the potential offers the Aip came back with I'm conflicted. 

Also this is only a high street bank, am I better off finding a local broker and going through them. 

Sorry for the astronomically long post, thankyou for the time and advice, 
Matt

What elements make up your UC claim? They may stop when you buy.

I would also spend six to twelve months throwing everything you can at clearing your debts before you take out a mortgage.

wigglers

Housing allowance. 
My wages partner wages and money for our 2 children.
Yeah but we would quite like to know what budget (if any) houses we could potentially afford. 
I'm aware the mortgage process is a lengthly one too. 
As I say obviously we would like to get the ball rolling ASAP as currently pay £1300 off someone else's, but not really sure if it's even worth looking into until July? 

silvercar

I’ll move this to the mortgage board. @wigglers

MattMattMattUK

wigglers said:

Housing allowance. 

You will loose that when you buy.

wigglers said:

My wages partner wages and money for our 2 children.

What do you mean by this?

wigglers said:

Yeah but we would quite like to know what budget (if any) houses we could potentially afford. 

Use an online calculator for a rough estimate, or speak to an independent broker, do not go direct to a lender.

wigglers said:

I'm aware the mortgage process is a lengthly one too.  

Not really, AIP in less than a week, the mortgage itself is rarely a holdup.

wigglers said:

As I say obviously we would like to get the ball rolling ASAP as currently pay £1300 off someone else's, but not really sure if it's even worth looking into until July? 

Your debts are an issue to me. They will reduce your borrowing capacity, but more because people that get a mortgage with unsecured debts rarely pay them off, they end up permanently carrying unsecured debt.

You say you have "saved" a deposit, but your deposit is less than your debts, so you have just borrowed a chunk of money as unsecured debt.

wigglers

You asked what makes up our Uc payment? I said "my wages, partners wages" etc.. That's what I meant by it. Speak to an independent local broker you mean? Not a high street bank?
We unfortunately had a few inlaws pass and were left some money so put it in the Lisa and saved to get the yearly bonus.
I realise currently we have debts but like I say the loan is almost clear and the cards are 0% and will be clear by July.
With the loan payment going straight to the cards.

ACG

The loan, most lenders will ignore that as it will finish by the time you complete anyway. 
The credit cards bar the £10k one will have little effect one way or the other and theoretically you could probably have them cleared within 3-4 months of completing anyway as your loan money could be used to pay them off. 

I think the big questions are: (im not looking for answers, just giving you something to think about)
How did that debt accumulate - if it was to pay for a wedding, its a one off (hopefully) event. If it is because you consistently spend more than you earn, you need to think about where that ends. Leading on from that...
Will the new mortgage be more or less than your rent? 

You also mention taking out another loan for a van so your finances potentially end up back where they are now. They are not bad by any stretch, but you have £13k worth of debt which isnt insignificant. 

Im not judging btw, I just think its important to have a conversation about the debt and think about is there a reason for it or not. If not, can you stop it? As a homeowner if it keeps building you could eventually lose your home. So best to cover it off now rather than down the line. 

wigglers

Yeah I realise it is the 10k card that will be left, I only mentioned a van as we would like one too be able to get out and explore while we are still young enough haha. 
Just with being left the money and wanting to use it wisely. I'm aware the sensible option is a mortgage before anything else.. It's just a matter of when and how long we wait. 
I appreciate the advice and thoughts as I said, It comes from the fact i was in a job for 20 years  where I earnt half what I do now. After changing career. 

MattMattMattUK

wigglers said:

You asked what makes up our Uc payment? I said "my wages, partners wages" etc.. That's what I meant by it.

Ok, so what I meant when I asked what makes up your UC payment is what is in the payment. It will normally have some detail of how the amount is calculated. I am actually surprised you get anything for UC with your salary but having checked in a calculator it does seem correct, however it also looks like you will not get anything once you are no longer paying rent. 

wigglers said:

Speak to an independent local broker you mean? Not a high street bank?

Yes, you will have more options, better deals and they will be able to choose lenders and products that best match your circumstances. 

wigglers said:

We unfortunately had a few inlaws pass and were left some money so put it in the Lisa and saved to get the yearly bonus.
I realise currently we have debts but like I say the loan is almost clear and the cards are 0% and will be clear by July.
With the loan payment going straight to the cards.

wigglers said:

Yeah I realise it is the 10k card that will be left, I only mentioned a van as we would like one too be able to get out and explore while we are still young enough haha. 
Just with being left the money and wanting to use it wisely.

July is next year, if you buy a home before then, then you will likely borrow more, you also mention wanting to take on additional borrowing which is somewhat of a red flag. Personally I would take the view that wisely would be to clear debts first before borrowing anything more, mortgage or otherwise. 

You also need to consider that you have a small deposit, £9k might seem like enough, but you need to account for stamp duty, conveyancing fees, searches, moving costs, basics like potentially needing minimal decoration, etc. Realistically you want 10% of the property value as a deposit, plus more to cover those costs. 

wigglers said:

I only mentioned a van as we would like one too be able to get out and explore while we are still young enough haha. 

Whilst I like the idea of that the reality is if you are choosing to do that by borrowing then it is unlikely to end well. How old are your children, school age? Once they are in school then your partner can work full time, potentially double her income, another £10k a year net would mean that you could buy a van in a year or two without debt, if you want to go away for a few weeks before that then rent one.

wigglers said:

I'm aware the sensible option is a mortgage before anything else.. It's just a matter of when and how long we wait. 

My advise would be to properly budget, first pay off debt as hard as you can, then throw as much as possible into deposit saving, even just doing that for a year will put you in a much stronger position and realistically now is not a great time to buy anyway. Most people are staying put, there is not much choice on the market and because of that limited supply it is much harder to negotiate, new builds as well are massively down in terms of numbers, developers do that to allow them to keep prices up. If your wife can also increase her income over the next year then that will also increase your options.

wigglers said:

I appreciate the advice and thoughts as I said, It comes from the fact i was in a job for 20 years  where I earnt half what I do now. After changing career. 

You have a good income, quite a bit above average, that helps, but your issue is your wife has a very low income, so combined your shared average income is average for working age people, hence thinking that getting the kids into school and your wife working full time will give you a lot more options. It is also often the case when people start earning more that they want to start ticking off some of those long term goals or dreams, that is a good thing, but the advice is always to plan and slow down just a little and things will come out much better. You have not owned a house for 41 years, you could try and buy now, or you could wait until it is 42 years, with no additional debt and a bigger deposit and be in a much stronger position.