Advice needed on application

Gibbsy2000

Hey guys,

Need some advice if you could help. My parents have just inherited a house in my local area which is worth approx 74000. She has offered me first refusal on it as long as i can raise around 68000. Problem is i'm unsure whether i'll be able to raise the cash needed....

Here's my financial situation:

I earn at the moment 13500 before tax, and earn an additional 1.5k. I have another person wanting to " lodge " in the house, and he is willing to pay around 275 - 300 a month to stay there. This should quite easily cover me, and i'll have no problems in meeting the repayments. However will the banks be so easy to convice.......

I've been with the halifax for 5 years and the've always done their best to meet my financial cirmcumstances, would this be the best place to start.... any help appreciated.

Regards,

hopefulfooluk

Hmm, at first thought a BTL mortgage might be appropriate but having said that they do require a sizeable deposit (more than 25% usually).

A 25yr repayment mortgage of 68000 will cost you probably about £450 a month. You need to ensure that you can cover all eventualities - interest rate rises, your "lodger" not being there or not paying up, the washing machine packing up, and so on, before you take this on. £450 on a salary of £13500 is a huge chunk out of your paycheque.

You could try applying to a broker and saying that your parents can act as guarantors if that would make a difference to the amount you could borrow - as long as they will! The banks may consider you less of a risk then.

My 2p's worth anyway, good luck whatever you decide.

Gibbsy2000

Cheers for the advice so far.

The lodger i was on about i have actually known for 2 years. Is it possible to have two peoples incomes included on the mortgage application, however have the house etc in my name only.....

this way we could secure buying the house as the income from both myself and the "lodger" would count.

YorkshireBoy

Gibbsy2000 wrote:

Is it possible to have two peoples incomes included on the mortgage application, however have the house etc in my name only.....

I wouldn't have thought so as there is no financial/marital association, and no joint responsibility.

I think the best you can do is put down the £15K earnings and try and get them to add on the £3,300 - £3,600 from your tax-free "rent-a-room" lodger.

So, at best, on a 3x multiple you're looking at a £55,800 mortgage - and that's at 100%. Can your parents help you out with the other £12,200?

Ian_W

Think I'm right in saying they won't count a second income unless it's a joint application, which isn't what you're after. They might allow you to count the income you receive from your lodger, but I'm not certain of that, and I'm sure they'd want some sort of rental agreement.

I 've just been on
Nationwide Building Society site
where they have some tools & calculators. For £15,000 income with no credit card or other debts etc they're saying they would lend up to £52,450 - which is a bit shy of what you're after - but not a zillion miles away.

Your parents acting as Guarentors [presuming they're agreeable ] as suggested above, might be one way.

There are some very helpful IFA's & Mortgage advisors who contribute to these threads so maybe one of them will come along tomorrow when they're all back from their country piles!! :rotfl:

If not I would suggest trying the Halifax who know you and possibly contacting London & Country or one of the other Brokers on the Mortgage page of this site.

Good luck, let us know how it works out.

Conrad

Gibbsy2000 wrote:

Hey guys,

Need some advice if you could help. My parents have just inherited a house in my local area which is worth approx 74000. She has offered me first refusal on it as long as i can raise around 68000. Problem is i'm unsure whether i'll be able to raise the cash needed....

Here's my financial situation:

I earn at the moment 13500 before tax, and earn an additional 1.5k. I have another person wanting to " lodge " in the house, and he is willing to pay around 275 - 300 a month to stay there. This should quite easily cover me, and i'll have no problems in meeting the repayments. However will the banks be so easy to convice.......

I've been with the halifax for 5 years and the've always done their best to meet my financial cirmcumstances, would this be the best place to start.... any help appreciated.

Regards,

There are 2 ways to approach this, either Self - Cert 90%, or use a lender that offers high income multiples.

A 3rd route is the guarantor method although I often find this route unsucesful as your parents age or other circumstances may proove a stumbling block.

Take care, you need to try and get the application accepted on first attempt, otherwise you might reduce your chances on any subsequent application. This means correctly completing the application, first time.

The above is guidance only and not professional advice, as I do not know the full picture re' your circumstances and needs.

morgansdad

Halifax now use affordability rather than income multiples. This link takes you to the Intermediaries affordability calculator (MS Excel spreadsheet).

Fill in the appropriate boxes and hit Calculate - this should give you an idea of how much they'd lend you.

http://www.halifax-intermediaries.co.uk/halifax/pdf/Affordability%20Model%20Calc%20v3.xls

FROM HALIFAX WEBSITE:
PLEASE NOTE: For the use of mortgage intermediaries and other professionals only.

If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise private clients, you must ensure it conforms to the Financial Services Authority's advising and selling rules.

payless

That lenders consumer facing site gives an affordability page ( which may well show up different figures as is much more basic) that is intended for consumer use
http://www.halifax.co.uk/mortgages/howmuchcaniborrow.shtml

brummybloke

you could of course negotiate the house price with your parents, pay £50k for the house with a mortgage and give them the rent each month to repay the extra?

and sell you the house privately, not through an estate agent, this saves more money and you know you can trust each other, just get a full survey done on the house first.