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Some problems first time buyers have in getting a mortgage seem to crop up again and again. Here are some of the ones we hear about regularly
Child Care Costs
You will not normally be turned down for a mortgage due to child care costs. However, childcare is very expensive so you will be granted a lower mortgage amount than other applicants with the same income but no kids.
Childcare costs are assessed as if they are a loan or credit commitment. Even without childcare costs, parents may be granted a lower mortgage than applicants without children. This is because the lender’s affordability calculators automatically factor in some of the additional expenses that children bring.
Some lenders will take things like child benefits and other state benefits into account. This can squeeze up the maximum mortgage allowable sometimes.
Mortgages Following Divorce/Separation
No one buys a home with a partner with the expectation of divorce or separation. All too often it happens though and when it does the family finances have to be re-organised and end up moving home.
Some of the popular questions we are asked include:
1. How do I remove my ex’s name from my mortgage?
2. Can I remove my name from my ex’s mortgage?
3. Am I allowed to have 2 mortgages?
The answer to all of the above can be yes but you will need expert mortgage advice. If you end up receiving maintenance this can sometimes be used as part of the assessable income for a mortgage.
I’m starting a new job, can I get a mortgage?
This one comes up a lot but is usually easy enough. Some lenders need you to have been at work continuously for a certain period of time but others don’t.
You can even get a mortgage if this is your first job. If you are due to start a new job soon then you may be able to get a mortgage if you have a signed contract and job offer letter.
Gaps in employment can be a problem with some lenders. Probationary periods tend to be ok though.
Proving Your Deposit
Anti-Money Laundering precautions are pretty strict these days. All mortgage lenders will need you to evidence your deposit and you will be asked to prove where the money has come from. Your solicitor and the estate agent you are buying from may ask you for this too.
Cash is a big no-no. Any big cash deposits into your bank will be questioned and your application may be rejected.
It is possible, in fact normal, for some or all of the deposit to come from a gift. The person gifting you the money will need to confirm in writing that it is a gift, not a loan.
