what is taken as mortgage income

muskateer

Hi

I need some help

I have just split from my husband and need to think about looking for a house and mortgage for myself and our son.

When looking for a mortgage, what do companies take into consideration as income, if it is just salary, I think that there is no way I will every buy,

My situation is annually, my income is
Salary - £15000
Maintenance - £7000
Tax credits - £11500
As you can see, my income is different from my salary and I keep getting conflicting information as to what is taken

Any help will be appreciated
Thanks

_Andy_

Depends on the lender

Couple of points to clarify though -

Is the maintenance via a court order?
Tax credits - WTC or WFTC?

Also how much deposit have you got at the moment and what property values are you looking at?

muskateer

HI

Thanks for responding, the maintenance is a verbal agreement but will be confirmed in writing through a solicitor - he is actually giving me more than the csa says he has too.

The tax credits are made up of Working tax credit and child tax credit as I am a single parent with a young child.

I will have about £60,000 deposit and poss lookingat between £170,000 and £190,000 purchase price. The cost of the mortgage and bills are not a problem and with my income I can afford it with prob about £700 left each month as play money really, it is just whether I will be lent the money????

Thanks
anna

_Andy_

Sounds do-able. As I said though, it will vary from one lender to another.

Your best bet would be to have a talk to a decent whole of market broker who can find a suitable lender and product for you.

muskateer

thank you so much - don't want to sound like someone who has no idea - but i don't, any recommendations on a whole of market advisor?

thanks
anna

herbiesjp

How long has the maintenance been paid for?
How old are the children?

This can impact on whether or not a lender will take these incomes into account

Also, do you have any other debts in the background? Do you have a good credit history?

muskateer

HIya

Our son is 3 - 4 in January,

We only split up in July but he has been paying money each month into my account since I gave up work when our son was born.

Any other advice really appreciated at the mo - I am so scared - I know that I can afford the monthly payments and to run a house, it is just getting someone to lend it to me!

Anna

muskateer

Sorry, meant to say, no other debts, good credit history, never had a bad debt, ccj, etc,etc

mic200202

You should be ok with this - assuming no other debt (which will reduce the borrowing capacity if kept on after the mortgage is started) then the salary and tax credits should see you through on their own. A good lender for this as a benchmark would be the Halifax who will use tax credits no probs.You may need to have the letter from the revenue advising the amount to hand,but if you have a good credit history, then it will sail through without too much hassle. As far as brokers concerned try impartial.co.uk which will give you some options for independent brokers in your area.

herbiesjp

Hi Anna

What goes in your favour here is the fact that you have a relatively low LTV and good credit history, with no other debts.

What could be tricky is the fact the maintenance does not have a long track record and is not supported by a court order. Also, different lenders will take varying amounts of the WTC into account etc.

Ordinarily it would seem easy to place, however in the current climate, seemingly easy cases are being made difficult by the lenders.

I think you would benefit from discussing your scenario with a whole of market adviser, so that they could discuss verbally with lenders first to make sure (as much as possible) that you tick all the right boxes for them before making an application

space_rider

I had to reduce my hours when I had a baby with a syndrome and claim tax credits. I moved house and changed my mortgage provider 2 years ago. I am with Abbey who do take tax credits into consideration. I did almost have a 50% LTV. You should be getting tax credits for a good few years(unless a change in government abolishes it) so you should be quite safe to use that as an income when applying for a mortgage. I don`t have any other debts and my friend who got a mortgage with Abbey 3 months ago had to pay off her debts when she bought a house after getting a divorce from her husband.

I have found though, that with trying to remortgage I was limited so just the Abbey and Halifax so be aware of this when you look for the best mortgage. I will be switching to a new product with Abbey for another 5 years to be on the safe side and I am hoping to overpay to make up for the equitey I have lost since buying this house!