What counts as income for a mortgage???

oldrodge

Hi Guys

I have been saving up to buy a property since I left uni 15 years ago (!) and although ive now (finally!) got a substantial deposit, my salary isnt great and my partner is disabled and is in receipt of benefits. I have ben told that one can only get 3 x a single salary or 3 x a couples salary/income these days. Can anyone tell me what counts as income when you take out a mortgage? Can I include my partners annual income from benefits?

Thanks
OR

benjo

Some lenders will accept 'some' benefits as income in full, some will accept 'some' benefits at 50% and some dont include benefits at all since they can be taken away at any time as there are no 'lifetime' benefit awards made these days (you can get an indefinate DLA award but it is now subject to random review 10,000 people per year I think).

Im guessing my answer doesnt actually help that much, Im sorry. An independant IFA will know which lenders will include benefits, which benefits they will consider and at what rates; alternatively you could ring around a few lenders and ask them what their lending criteria is but that might get time consuming.

Goodluck.

cattie

It's hard to find a lender that accepts benefits as income & any means tested benefits are not taken into account at all.

Northern rock used to be the one building society that were quite lax about granting mortgages to people on disability benefits, but look what happened to them.

Now all mortage lenders have tightend their criteria & unless your income is enough to support the mortgage I fear you may struggle to find a lender willing to grant you a mortgage.

oldrodge

Oh dear.

Thank you for your replies, much appreciated.

I wonder though, and sorry if this makes me sound idiotic - does the 3xsalary rule really apply? There used to be people who got 10xsalary mortgages and non standard ones [for people with non standard employment] but im guessing these were the catalysts of the big CC and are now redundant?

alexlyne

After speaking to both an IFA and a high street lender, both fixed their valuations at 3.5x combined incomes. I have heard that depending on circumstances, 'affordability' comes into it, but I know nothing about that.

poppy10_2

oldrodge wrote: »

There used to be people who got 10xsalary mortgages and non standard ones

Those days are over, thank god

bob79

oldrodge wrote: »

does the 3xsalary rule really apply?

Lenders have become stricter on salary multiples, but many will still do 4x single salary if your salary is not very low. Banks often have a calculator on their website which shows you how much they will lend on a given salary, e.g. the one from Lloyds can be found here:
http://mortgagetools.lloydstsb.com/borrowing_calc.asp