Jenny is 23 and is in the early stages of her career as an HR Manager. Her income is currently £22k but she is on a graduate scheme which guarantees further rises and she expects to be earning around £30k within the next 3 or 4 years. Her chosen career provides scope for further progression beyond that in the future.
Jenny has student debt and a car loan of £215 a month, but she has a good credit file with no issues. She also has a 10% deposit which is partly an inheritance from her grandparents and is partly a gift from her mum. She hasn’t really saved any deposit herself, but she has saved enough to cover the fees and moving costs that she will incur when she buys her first home.
Jenny wants to buy a flat for £150k and would like to borrow £135k over 20 years. This is shorter than the term many first-time buyers borrow over as she is keen to build equity so that she can climb the property ladder further down the line.
It would probably not be possible for Jenny to obtain this mortgage by herself, but her widowed mum is able to assist using the Furness Joint Borrower-Sole Owner scheme. Mum (Christine) is 53 and earns £51k a year working for a local authority as a senior housing officer. She has £15k remaining on her own mortgage, a car loan of £230 a month and a small amount outstanding on a couple of store cards.
As the mortgage term will extend beyond Christine’s expected retirement date, Furness will need to ensure that she has enough pension provision. Jenny may well have taken on the mortgage solely in her own name long before then but as a responsible lender, Furness will ensure that the mortgage is affordable throughout the term.
By adding together Jenny and Christine’s income, the mortgage application easily passes the Furness affordability assessment even after their financial commitments are included. To ensure that everyone understands what they are entering into, Jenny and Christine will be required to receive independent legal advice during the application process.
If you are in a similar situation, or want just to talk around your options then call us 0800 220 568
All our case studies are based on real cases but the names have been changed and stock images have been used to protect confidentiality.