What counts as income for mortgage calculation

thepeachyone

Although my husband works, the vast majority of our income is made up from things like maintenance payments for the children, tax credits, DLA and my incapacity benefit. So what counts as income when you are applying for a mortgage? Just your salary? Or benefits too?

_Andy_

It varies lender to lender.
What is your situation, is it a remortgage or a purchase?

Cozworth806

Lloyds took ChB and CTC into account and offered a mortgage of £123,000
Nationwide didn't and offered £81,000

herbiesjp

The benefits can be used as well, however different lenders use different percentages of that income. So some may use 100% of that extra income and others may use 50%.

Maintenance paymenst again pay or may not be used depending on the lender, and how long they have been going for, and whether or not they are supported by a court order or not.

I think if you are looking to maximise your mortgage potential, you may well be best placed speaking to a whole of market adviser as tehy will be able to find out very quickly which lenders can reach the mortgage amount you require - assuming it is affordable for you to do so.

thepeachyone

_Andy_ wrote: »

It varies lender to lender.
What is your situation, is it a remortgage or a purchase?

We are renting at the moment, so its a purchase I suppose.

paulsin

As any benefits you receive are assigned to a particular cost base i.e. incapacity benfit, to aid you with costs incurrered due to you incapcaity, child tax benefit is for you children etc. None of your benefits should be included as income, as it is not income. They are benefits desgined to support the costs in your life. If you have enough left over to be treating it as income then tell them and get your payment reduced.

The 2 key issues I have with this question is:

1. Any benefits you receive are not your 'income' and should not be treated as such by you. They are designed to support you.
2. Getting a mortgage based on income which is already assigned is very dangerous and your affordability will be distorted. e.g. receiving £500pm in incap beneift, which is used maybe to pay for a carer should not be included, as the benefit has no effect on you ability to pay an incresed mortgage. Go with the lender that is not including your benefits in the calculation, its a lower offer but they are the more responsible lender.

_Andy_

thepeachyone wrote: »

We are renting at the moment, so its a purchase I suppose.

As herbie has said, your best bet now is to speak to a broker.

How much deposit have you got saved up?

Kavanne

paulsin wrote: »

None of your benefits should be included as income, as it is not income.

HOWEVER, this is just your opinion, it seems. Some lenders WILL include it in affordability, some won't The OP will have to do some research and perhaps consult an independent advisor.

blueberrypie

paulsin wrote: »

As any benefits you receive are assigned to a particular cost base i.e. incapacity benfit, to aid you with costs incurrered due to you incapcaity, child tax benefit is for you children etc. None of your benefits should be included as income, as it is not income.

Child Benefit and Child Tax Credit are there to offset the costs of raising and caring for a child. One of those costs is housing.

Disability Living Allowance and Incapacity Benefit are there to offset the costs of a disability - which might well include increased housing costs, such as a home on one storey or a home with wider doors to allow for wheelchairs or a larger bathroom to allow for space for adaptations.

skoda38

hi, try the halifax mortgage calculator it will give you an idea of what you can lend and there is an allowance for tax credits/benefits

https://www.halifax.co.uk/mortgages/calculator/mortcal_main.asp?brand=halifax&app=borrow

mouthscradle

Do any lenders take into account student loan/grants? OH is a graduate with a good job but I'm still studying away, hoping to have £20-30k for a deposit on a house of around £120k end of this year/early next year.