There are many different problems that you could be faced with as a first time buyer in York who is starting their very own mortgage process. You’ll find that the same sort of issues can also occur for people who are moving home in York.
We often see similar issues crop back up, time and time again. Below are some of the most frequently found.
The likelihood of you actually being turned down for a mortgage because of childcare costs, is fairly slim, though you may have issues getting the mortgage you would like. As many parents will be aware, childcare can be incredibly expensive.
Due to how much it can cost, you may find that you are given a lower mortgage amount than you had previously anticipated, as it will be a large recurring outgoing. Someone with the same income and no childcare costs, may have access to a higher amount than you.
Many mortgage lenders will assess childcare costs as an extra financial commitment, despite many needing it. Even without this, having children generally means your monthly outgoings are going to be higher than a couple who perhaps don’t have kids, which could still mean a lower amount.
The reason that this is the case, is because the mortgage lenders affordability calculators will factor in additional expenses, which unfortunately with some mortgage lenders can include children.
Thankfully this isn’t the case everywhere you go, as there are also plenty who are lenient with these costs. Some may take into account things like child benefits and other state benefits, in order to perhaps give you a little higher maximum mortgage allowed.
This is something we hear of frequently, but it typically has a straightforward solution.
There are some mortgage lenders who will want to see that you have continuously worked for a specific period of time, whilst others will be less strict, going as far as to even accept some who are starting their first job.
If you are due to start a new job soon, then you may be able to obtain a mortgage if you have a signed contract and job offer letter. Probationary periods also tend to be fine. That being said, having any gaps in employment can flag up as a potential issue with some mortgage lenders.
With this particular circumstance, there are a lot of different parameters and criteria to consider, so it’s always worth speaking to a trusted mortgage advisor in York first, to see what options could be available to you.
Another common mortgage problem that we have seen, is the applicant for the mortgage having to prove that they have a sufficient deposit, and how those funds have built up. This is to abide by anti-money laundering rules.
In addition to this being a factor in your mortgage application process, it is also entirely likely that your solicitor or even the estate agent who is selling the property, may also ask for evidence of your deposit.
The important thing to remember is that putting down a cash deposit is a big red flag, you shouldn’t do this. Any large cash deposits into your bank account will also be heavily questioned and you may even find that your mortgage application could be rejected.
An alternative, if you are struggling to save up the initial deposit for a property purchase, is a gifted deposit. Gifted deposits are mostly popular with first time buyers in York. In doing so, a family member or friend may be able to gift you either a portion of, or the full amount of deposit.
This in turn can help you get onto the property ladder. Depending on the size of the gifted deposit, it may also open you up to much better interest rates and deals. Please note though, that the donor will have to sign a form to make it clear that it is only a gift and not a loan.
Furthermore, they too will be subject to proving how they built up the funds for their gift, possibly even being required to provide ID and bank statements to the mortgage lender.
This applies more to people who already own a home, but still frequently comes up when we speak to customers. Of course, nobody ever buys a home expecting to be divorced or separated, but it does unfortunately happen, leaving joint finances in need of reorganisation.
Some common questions we get asked in this situation include:
The answer to all the above can be yes, but it is always better to get expert mortgage advice from an experienced, open & honest mortgage advisor in York, prior to making any mortgage applications.
It is also worth bearing in mind, that if you end up receiving maintenance, this can sometimes be used as part of the assessable income for your mortgage application. This might be useful if you’re also concerned regarding the initial point mentioned, in childcare costs.
Last edited 22/09/2022