What counts as income for mortgage calculation

Kavanne

mouthscradle wrote: »

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.

I have been told in a thread I started previously that they won't. Definitely a NO for student loans as it's borrowing in the first place but I am not sure why they don't accept grants, but they don't.

thepeachyone

A mortgage advisor had a brief chat with me today and it seems that DLA isnt taken into account by many lenders, BUT Incapacity Benefit, Child Benefit, Child Tax Credit and Child Maintenance are counted as income. I will be going to a different advisor though as this one isnt whole of market, but she gave me a good idea of how much we can borrow.

thepeachyone

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. 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.

This is rubbish as you are making assumptions about something you know nothing about.

herbiesjp

DLA is taken into account by many lenders - as long as it is backed up by the paperwork, there are lenders that will accept this

paulsin

thepeachyone wrote: »

This is rubbish as you are making assumptions about something you know nothing about.

The main point I was getting at was that a lender who uses benefits in their income calculations are not the most responisble people as it is very difficult to assess what propertion of that is already assigned i.e. to carers. Getting the largest mortgage you can will stretch yourself as it is-all I was saying was that using benefits as means of increasing this percentage will not give a true reflection of your affordability and I'm surprised that they are doing it in this market.

morg_monster

mouthscradle wrote: »

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.

Hi I'm in this situation too, my OH earns a good (but civil servant) salary but we are in London so houses are expensive. I'm in the first year of a funded 3yr PhD so this is going to be a problem for a while!
My dad spoke (informally) to a friend of his who is an IFA about our problem and he said he could think of 3 BS's who MIGHT possibly still take studentships, but it was unlikely. They were Skipton, Nottingham, Coventry. I looked on their websites and they all require at least 25% deposit for a decent rate at the mo (cov has a 15% one with a higher rate). So for us they are no go at the moment as we have probably won't quite make that. So I did not go any further with it as we won't be looking to buy til the autumn anyway. We're hoping we might be able to get by on OH's salary and my part time job, if we can get a 4x multiple.

do you know, in the good old days, they used to gross up studentships... so my £15000 studentship would count for about £20000+ in the calculation...