How do banks assess mortgage affordability with kids??

Aspiration

Evening, I have tried searching on the net for along time and can't really seem to find an actual answer to my question.

'How do banks assess my affordability, i have a wife and 2 young children?' The usual criteria one salary times 3.5 or both salaries x2 etc i assume don't apply???

Any guidance or general rules that anyone can provide would be great,

Thanks

LilacPixie

I don't think they have a strict formula TBH. Far too many variables. our lender asked if we had child care costs as dual income family. Have a look at the affordability calculators on some lenders websites for an idea

Thrugelmir

Suggest you use your commonsense to decide what you can realistically afford to pay out every month. Pushing the boundaries of borrowing carries far more downside than upside.

Aspiration

Cheers been trying for hours, we are a one income family so i have no childcare costs but guess it would impact the figure they'd lend, thanks for reply

Aspiration

It's for my re mortgage, when we got our original mortgage we had no children, i re mortgage mid next year and we have one, but recently found out she is pregnant. We have high equity in house, but she will not be going back to work so just trying to plan for the future,

Thanks

Thrugelmir

Different lenders apply different criteria in calculating affordability.

What interest rate are you currently paying?

whysitallsocomplicated

Hi
Dont know if it helps but am in the process of getting a mortgage with RBS. When assessing affordarbility they took into account our child benifit and tax credits as well as salary. we have 2 young children the same as yourself

michaels

HSBC online calculator shows they will lend me about 4.5x with no dependants but only about 2.25 x with SAHM and 3 kids.

herbiesjp

If going on a new rate with your current lender, you will be fine.

If looking at moving away, each lender is different, and so it will depend on the lending/affordability criteria of the chosen lender.

Aspiration

Thanks guys, my current mortgage is up for renewal at the beginning of June, i'm judt trying to get organized with where i think i'll be. I am currently with Santendar, i had a fixed mortgage for 2 years but was hoping to release some equity and clear CC'S. I currently earn £50k, bonus will be approx 27% of that payed in April approx but obviously can't guarantee that. My house is worth approx £310k, mortgage will be at £179 when go to re mortgage and ideally wanted £20k and that should leave me pretty much without any CC's then. By that point i'll have one SAHM, One son and a new born baby probably (Due date of 4th June 2011).

Thanks for the advice so far, def up for hearing if there is anything else or info that you guys think would help me,

Thanks Aspiration