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

chirpchirp

Child benefits have a known date of cessation so a mortgage company that is prepared to loan on this income, could state that the term of the mortgage should end at the time that the know child benefits will end.

Providing that a person remains employed then their salary is also likely to increase over time and thus offset some of the amount that will be lost by the cessation of the child benefits.

Cazza

So, the maximum term available to someone with a child, using their child benefit towards the mortgage would be 16 or 18 years? And you need to predict when your baby is 6 months old, whether they will continue in education, so you can decide on the 16 or 18 year term? Of course, a 16 or 18 year term mortgage is perfectly affordable to families with young children too.

I can see your point OP, but it just really doesn't work in real life!

chirpchirp

In most circumstances where maitenence etc is to be used due to a split some of the mortgage will already have been paid off and a 25 year mortgage may not be required.

For children under a certain age, the school leaving age has now been raised to 18.

Cazza

Yep, I'd forgotten the school leaving age had been raised to 18!

What about couples who haven't split up though?

chirpchirp

Well they could say we will lend you this amount for 18 years which takes this into account or this lesser amount for a longer period.

However, the original post is in relation to people gaining a mortgage in their own right and not in relation to couples.

Cazza

Would that not be discrimination against families with two parents?

chirpchirp

No, because all income streams could be used for everyone.

However , the original post asked if the assumptions were correct, if by only allowing salary to be considered, if banks were being sexist.

Aside to the original post, I find it interesting that my lender states income in their calculator but will only consider salary.

Zelie

It's not really an assumption if it is based in fact. Women *do* earn less and tend to be the primary caregivers for children and thus have benefits etc in their names. When that evens out let me know and I'll join the whining about mortgages.

Conrad

chirpchirp wrote: »

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.

QUOTE]

You need to consider this from a lenders point of view. Statistically maintenance is less reliable than salary. Imagine a thread over on the debt board with this title;

'Bank took into account maintenance knowing full well the risks, and now hubby has defaulted. Can I argue in the repo hearing that the Bank knew the risks so are not entitled to throw me out'.

Furthermore everyone on Question Time keeps applauding calls fopr tighter mortgage regulation (just listen to the applause every time Vince Cable says this). Well, you've got it now.

Conrad

Also would you say this was sexist;

'Woman thrown out of home just because ex husband defaulted on maintenance'.

It's all too easy to reach for the isms.