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  • FIRST POST
    • alabama1985
    • By alabama1985 13th Jan 19, 9:25 AM
    • 21Posts
    • 1Thanks
    alabama1985
    Mortgage help!
    • #1
    • 13th Jan 19, 9:25 AM
    Mortgage help! 13th Jan 19 at 9:25 AM
    Hi all,

    I’ve posted a few times on the forum about several things but wanted to paint a whole picture to get some advice as worried sick and losing sleep.

    Myself and my husband rent a house from my parents, due to their age this June they will have to end the mortgage or sell to us, we desperately need to buy the place as we live here with our 2 little ones.

    We got ourselves into a pickle with credit card debt (about 10k) which we’ve never missed a payment with, but my dad is very kindly offered to gift us instead Of deposit help and that will be all sorted and paid off in full this week (as well as closing some of the cc account entirely)

    we also have savings/deposit of nearly 15k.

    My concern is that we need the
    Mortgage by June, our credit scores are ok, my husbands is better, and I’m sure now the cards are being paid off they will improve dramatically over the next month or so, as will our disposable income, we were paying approx 300 a month to credit cards and this will now be eliminated.

    I had 2 ccjs (small amounts, satisfied a couple of years ago) that don’t drop off until September this year (however for some reason they don’t show on Equifax??)
    I also have a default from 2014 which is now a small amount of 300 , I am going to pay this off before we apply so it’s satisfied, but obviously it still shows on my report until next year.

    Our salaries are:

    Husband:
    21,500
    Plus a self employed business which he’s had for 2 years, take home from last year 6000, 3000 the year before

    Myself:
    10,481
    Plus child benefit of 1644 per annum (kids are 1 and 4)


    The house is 158,000

    My question is, will we be ok for a mortgage now that he debt is being paid off? I know it’s unlikely to be high street due to my ccjs and default, but I’m just worried as the credit cards are only just being paid off, and we are aiming to apply around April. As I said eveything else has always been paid on time, and no missed payments since around 2015.

    Thanks in advance,
Page 1
    • Blueoctopus
    • By Blueoctopus 13th Jan 19, 9:46 AM
    • 20 Posts
    • 5 Thanks
    Blueoctopus
    • #2
    • 13th Jan 19, 9:46 AM
    • #2
    • 13th Jan 19, 9:46 AM
    Hi,
    I'm going to be honest I can't see you being able to borrow that much.
    We bought the house we rented from my parents last year on similar salaries (around 30,000 combined plus child benefit for two children) we have no adverse credit, or child care costs and only 2000 credit card balance. We were able to borrow a maximum of 104,000.
    Luckily the outstanding balance on my parents mortgage was 90,000 and they were willing to gift us the equity in the house meaning we could go ahead and with an excellent LTV.
    Would this be a possibility for you?
    • alabama1985
    • By alabama1985 14th Jan 19, 8:49 AM
    • 21 Posts
    • 1 Thanks
    alabama1985
    • #3
    • 14th Jan 19, 8:49 AM
    • #3
    • 14th Jan 19, 8:49 AM
    Bump thanks
    • silvercar
    • By silvercar 14th Jan 19, 9:02 AM
    • 38,472 Posts
    • 161,299 Thanks
    silvercar
    • #4
    • 14th Jan 19, 9:02 AM
    • #4
    • 14th Jan 19, 9:02 AM
    Lenders will often allow an extension for a few months to an interest only mortgage, so it may be that your parents could keep the mortgage going until September if that makes things easier for you.

    Pay your 2014 debt off as soon as you can, so you can apply with a clean slate. It will look better than a statement that you can pay it off.
    • alabama1985
    • By alabama1985 14th Jan 19, 9:04 AM
    • 21 Posts
    • 1 Thanks
    alabama1985
    • #5
    • 14th Jan 19, 9:04 AM
    • #5
    • 14th Jan 19, 9:04 AM
    Lenders will often allow an extension for a few months to an interest only mortgage, so it may be that your parents could keep the mortgage going until September if that makes things easier for you.

    Pay your 2014 debt off as soon as you can, so you can apply with a clean slate. It will look better than a statement that you can pay it off.
    Originally posted by silvercar
    Ok great theirs is an interest only mortgage so perhaps that will be an option, thanks!
    • tlc678910
    • By tlc678910 15th Jan 19, 3:59 PM
    • 780 Posts
    • 1,219 Thanks
    tlc678910
    • #6
    • 15th Jan 19, 3:59 PM
    • #6
    • 15th Jan 19, 3:59 PM
    Hi,
    Can I enquire about the mortgage ending in June. Is it the entire mortgage that is ending (after 15/20 year term or whatever) or is it the promotional period such as a 5 year fix?

    Do your parents owe 158,000 or do they owe less? If there is equity do your parents need the money or could they gift you early inheritance (altering their will to reflect this if you have siblings) to bring down the amount that you need to raise.

    Tlc
    • enthusiasticsaver
    • By enthusiasticsaver 15th Jan 19, 4:20 PM
    • 7,666 Posts
    • 17,070 Thanks
    enthusiasticsaver
    • #7
    • 15th Jan 19, 4:20 PM
    • #7
    • 15th Jan 19, 4:20 PM
    How old are your parents? That will determine whether an extension will be allowed.

    What mortgage are you looking for? The value of the property is 158k but you will not be allowed 100% so you will need at least a 10% deposit so 15800. You will also need to find costs for surveys and legal costs and stamp duty .


    Generally lenders will lend up to 4 times gross income although some go higher. You would be best going to a broker who specialises in bad credit records or if your parents are able to get an extension delay it until your records are better. You might have an issue with your husbands self employment income as usually they like to see 3 years accounts but again some lenders are less fussy which is why a broker would be a good idea for you. If they take your husbands SE income and they are happy to overlook the bad credit then you might be able to get enough to buy the property.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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