Can I use my maintenance payments to get a mortgage?
Q: I get child and spousal maintenance from my ex husband. Its all legally binding following a court order. This is more than enough to cover mortgage repayments for a 3 bed house locally. I'm currently in rented with my two children paying over £1000 a month which doesn't make sense. Is there any way my child support can be used to cover a mortgage? As I don't have much in the way of a deposit can I apply to Help to Buy?
The fact that your maintenance income has been awarded by court order will only improve the choice of lender that will be able to take the income into account. The problem has often been for those that have had maintenance agreed in an informal agreement between the two parties although more lenders are now able to look at a track record of payments being made as adequate evidence.
Having said that, some lenders will treat the income as secondary income which means that they would only take 50-60 % of the maintenance into account when deciding how much they could lend.
Some lenders will also want the maintenance to be additional to another income source, especially where the maintenance is for the children. Lenders will want to see that the situation is sustainable, so that the mortgage will remain affordable when those payments cease.
Help to Buy is open to all homebuyers not just first time buyers so there is nothing to say that you can’t use the Help to Buy schemes as long as you don’t have any other property. The scheme has two separate strands with the first offering an equity loan on new build properties and the second aiming to increase the number of 95% mortgage deals. These still come with higher rates than available for those with larger deposits and credit scoring requirements are likely to be high.
David Hollingworth, London & Country Mortgages
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