New borrowing criteria for Nationwide Mortgages

confused.c

I am an existing Nationwide Mtg customer and have had savings accounts etc since I was about 16, everything i have is with Nationwide. I was sadly made redundant in November from work and have always worked, luckily my parter has a well paid job so I can concentrate in caring for my 2 1/2 year old and get ready for our new child which is expected towards the end of the year. We put our house up for sale early last year, before I was made redundant, and had a mtg quote for a new property, we were told how much we would be able to lend. I have since checked again only to discover that if i now try for a new mtg in joint names with my partner we will be accepted for a lot less than what we were accepted for before, £30000 less, even though our circumstances haven't changed. on the calculator it asks if you have any dependents? if i don't include my little girl and just put it in his name, we can be accepted for more even tho it asks us to include any child benefits and tax credts, so basically we are putting in more income but being accepted for less, i tried putting dependants 2 in and it came up that we would be accepted for less again, I can't see how nationwide can do this, they may come back and say for its because of living costs, but that is why we get the child benefits and tax credits!!!!! are Nationwide discriminating against people who want children???? also what difference does it make if one person is working and the other one isn't, surely it;s as long as they can afford the mortgage, to give you an idea we can now only borrow 1 1/2 times my partners income. i would love to go elsewhere but am currently tied in to an existing fixed rate so can only do that if i pay an ERC. nationwide is sinking rapidly and I would expect that I am not the only customer with a view on this!

Thrugelmir

i tried putting dependants 2 in and it came up that we would be accepted for less again, I can't see how nationwide can do this,

Did you really expect the Nationwide to lend more ?

The Nationwide is acting responsibly to stop people over stretching themselves financially.

inca_2

The difference being though that when you input just your partner and his income the affordability will be based on a single person with no dependants and no financial responsibility for anyone else. When you then add a partner and two children the available/disposable income will decrease dramatically, the income input will be taken into account on the basis that it is supporting all four of you plus bills etc before deciding what amount of mortgage it will be able to support after this. If you haven't added any income in to account for your tax credits etc then the system will not know that there is any other income? Also whilst lenders may accept the tax credits in their calculations they might not necessarily take into account 100% of the amount. You mention that the figures you obtained last year were before you were made redundant so I'm assuming this income was included when affordability was being worked out? That will obviously also affect the amount you can borrow if the level of income has decreased since you originally spoke to Nationwide.

It isn't discrimination because you have children, it's responsible lending and at the end of the day it is their policy/criteria which they have every right to create and impose as it's their money they are lending. Apologies if that sounds blunt or harsh as it isn't meant to, just saying it how it is. Also, when you had the previous quote was it based on one or two dependants? (Just looking at the timescales you mention and noticing that you may well not have been pregnant at the time). I realise things aren't always black and white and it's not my place to tell you whether or not the mortgage you want is affordable to you, it may well be right now for all I know, but the lender has to take their view on what they will deem affordable based on the information they have and the level of risk it would present to them.

Dan_1976

Going back a few years lender would not lend using both incomes as back then, the woman had the babies. Also how do Nationwide know if benefits will remain the same after the election?

confused.c

the quote i had before was also not taking my income into consideration, that is why i was so surprised that it had changed so much when my circumstances hadn't changed, obviously when i was working we could borrow more again as this was including the income i had had previously. it doesn't explain that we can only borrow 1 1/2 times income when my partner is on a very good wage, we have more than enough money over to pay for the mtg we want and pay for the every day living costs which we have.

I have experience in the mtg sector and how they work out the affordability which is why i find it strange how this figure is worked out, the credit scoring had not even been done at this stage and it came out with such a low figure. The tax credits and child benefit was not even included in the quote previously.

Whilst it is good to be responsible when lending they also should be realistic! What should a person do? not have children so they can buy a house!

confused.c

Thrugelmir wrote: »

Did you really expect the Nationwide to lend more ?

The Nationwide is acting responsibly to stop people over stretching themselves financially.

while this is good, that is not true in our case as it came up we can only borrow 1 1/2 times partners income, we have more than enough money to pay for the mtg we want and our every day living costs, so yes i do expect them to lend more, if i was someone with children who earned half what my partner did we wouldn't be able to buy a house. So whilst i agree with lending responsibly, 1 1/2 times income is unrealistic.