Are banks sexist the way they apply income multiples for mortgages?

chirpchirp

Based on the following assumptions being correct do you think it could be argues that banks are sexist in the way they apply income multiples?

Asumptions :

1. Women's pay is normally less than men
2. Women are normally paid child benefit
3. Women are more likely than men to be in receipt of maitenence following a divorce or in receipt of maitenence via the CSA.

When most banks/building societies count income they actually only count salary which can make it extremely difficult for anyone to obtain a mortgage in their own right. However, many women may have extra income which isn't counted. Whilst there are some banks/building societies which allow other income to be taken into account, they charge a premium for this.

I thought this would make an interesting debate. I have some personal experience of this situation. However, I'm not saying banks are being sexist as I know that there are other income streams they don't count such as dividends etc. I'm just trying to start what could be an interesting debate!

PasturesNew

It's not sexist, it's based on the mathematics of risk and probability.

It's not a right to have a mortgage, there will always be people that can't afford them.

Cazza

The income multiples are usually applied as (for example) 3x Joint or 3.5+1, there is no rule to say that the man has to be the first applicant on the mortgage. Child benefit isn't taken into account as it suposed to be spent on the Children, not a mortgage. Working tax credits are often taken into account. Many lenders will use if it is Court Ordered and has 12 months track record. Who says they won't take dividends into account? If you're a self employed director of a limited company, they usually work from salary plus dividends?

nearlyrich

When we had a mortgage we only ever used our basic salaries to decide if we could afford it, nothing else is guaranteed, I was pretty certain of my commission payments but would never have counted my chickens as it were....

Really2

chirpchirp wrote: »

Based on the following assumptions being correct do you think it could be argues that banks are sexist in the way they apply income multiples?

Asumptions :

1. Women's pay is normally less than men
2. Women are normally paid child benefit
3. Women are more likely than men to be in receipt of maitenence following a divorce or in receipt of maitenence via the CSA.

When most banks/building societies count income they actually only count salary which can make it extremely difficult for anyone to obtain a mortgage in their own right. However, many women may have extra income which isn't counted. Whilst there are some banks/building societies which allow other income to be taken into account, they charge a premium for this.

I thought this would make an interesting debate.

They do take it into account on the formal offer as they asses all income.

But also if they take it in to account does that not mean you have a child and that money is to cover the costs of looking after that child not to pay a mortgage?

They would lower your mortgage on outgoings just like the man who is paying maintenance.
Are the banks being sexist because they deduct the maintenance out of a divorced mans mortgage affordability.

A mortgage is based of affordability. Basically what you have left after expenses, not what is in-between your legs.

LydiaJ

When I was thinking of moving last summer, I found that the mortgage lenders I spoke to were prepared to count WTC. They were also prepared to count maintenance if it was covered by a court order but not if it was an informal arrangement.

The letting agent I spoke to, on the other hand, wouldn't count anything at all except salary. I found it bizarre that I could find two lenders happy to lend me well over £100k, but wouldn't have been allowed to take on a tenancy for £700pm.

RabbitMad

I think in today's crazy world that you might be on to something OP. Whilst the argument is wrong it wouldn't suprise me if somebdoy used equality law to bring a court case.

chirpchirp

As I said at the start, I don't necessarily agree with the premise of my original post it was a fleeting thought that I had.

I disagree with those who say that child benefit should not be used to pay towards a mortgage. Child benefit is there for the benefit of the children and a mortgage gives a suitable place for the children to live and in my opinion should be used towards it as should the maitenence. When maitenence was decided the mortgage was taken into consideration as the children need somewhere to live.

In my situation, I have a mortgage with my ex-husband. He can't get another mortgage as our mortgage company won't release him from the mortgage as the mortgage is in joint names. When he does come to find a mortgage, obviously the maitenence he gives me will be deducted from the amount he can borrow.

When I contacted my mortgage provider they told me that they would only look at my salary as none of the other income is guaranteed, despite the fact they had a copy of the court order in front of them. I found this amazing as obviously my salary isn't guaranteed either.

Using all my streams of income, I could easily afford to pay the mortgage (and do so!). However, on my salary alone I show as not being able to afford the mortgage.

I think I'm with RabbitMad's on this one. I've never been someone who believes in laws which discriminate in favour of someone over someone else.

Emy1501

chirpchirp wrote: »

As I said at the start, I don't necessarily agree with the premise of my original post it was a fleeting thought that I had.

I disagree with those who say that child benefit should not be used to pay towards a mortgage. Child benefit is there for the benefit of the children and a mortgage gives a suitable place for the children to live and in my opinion should be used towards it as should the maitenence. When maitenence was decided the mortgage was taken into consideration as the children need somewhere to live.

In my situation, I have a mortgage with my ex-husband. He can't get another mortgage as our mortgage company won't release him from the mortgage as the mortgage is in joint names. When he does come to find a mortgage, obviously the maitenence he gives me will be deducted from the amount he can borrow.

When I contacted my mortgage provider they told me that they would only look at my salary as none of the other income is guaranteed, despite the fact they had a copy of the court order in front of them. I found this amazing as obviously my salary isn't guaranteed either.

Using all my streams of income, I could easily afford to pay the mortgage (and do so!). However, on my salary alone I show as not being able to afford the mortgage.

I think I'm with RabbitMad's on this one. I've never been someone who believes in laws which discriminate in favour of someone over someone else.

Not sure Court Orders are always worth the paper they are written on. When my Stepsons dad stopped paying the court told us to go to the CSA. He is back in work now and we gat a tidy monthly some for stepson but we would not use this figue to gain a mortgage or child benefit payment.

People are scraping the barrel in my opinion if they need to rely on all these types of payments to get a mortgage.

Cazza

chirpchirp wrote: »

I disagree with those who say that child benefit should not be used to pay towards a mortgage. Child benefit is there for the benefit of the children and a mortgage gives a suitable place for the children to live and in my opinion should be used towards it as should the maitenence. When maitenence was decided the mortgage was taken into consideration as the children need somewhere to live.

In my situation, I have a mortgage with my ex-husband. He can't get another mortgage as our mortgage company won't release him from the mortgage as the mortgage is in joint names. When he does come to find a mortgage, obviously the maitenence he gives me will be deducted from the amount he can borrow.

When I contacted my mortgage provider they told me that they would only look at my salary as none of the other income is guaranteed, despite the fact they had a copy of the court order in front of them. I found this amazing as obviously my salary isn't guaranteed either.

I'm not stating a personal opnion, I'm telling you my professional experience. Child benefit will not be taken into account as the payment is intended to be spent on essential items for the child. This is th same logic as that which is applied to Working Tax Credits - ie WTC will be used but the Child care element will not be taken into account. With men who pay maintenance, the same policy is applied as is applie to the receipiant. If the maintenance is Court Ordered it will be taken into account, if it is a private agreement it will not be taken into account. If you have had issues with yur mortgage provider then you are talking to the wrong lender, there will always be different ways different types of income are dealt with. If you talk to an independent mortgage broker, they wil be able to advise you which lenders will take your maintenance into account.

mitchaa

chirpchirp wrote: »

Based on the following assumptions being correct do you think it could be argues that banks are sexist in the way they apply income multiples?

Asumptions :

1. Women's pay is normally less than men
2. Women are normally paid child benefit
3. Women are more likely than men to be in receipt of maitenence following a divorce or in receipt of maitenence via the CSA.

When most banks/building societies count income they actually only count salary which can make it extremely difficult for anyone to obtain a mortgage in their own right. However, many women may have extra income which isn't counted. Whilst there are some banks/building societies which allow other income to be taken into account, they charge a premium for this.

I thought this would make an interesting debate. I have some personal experience of this situation. However, I'm not saying banks are being sexist as I know that there are other income streams they don't count such as dividends etc. I'm just trying to start what could be an interesting debate!

If you get a mortgage based on child benefits (Child benefit, tax credits, CSA) what happens when your child is no longer a child and this income ceases to exist?