FirstBuy Scheme & "Disposable Income"

Davewils

Hi, Hope this is the right section.

I am looking at buying my first house in 2012, I already have plans to view a Bovis development which is happening near me, with hopes to reserve a home off-plan.

As such i would be hoping to qualify for the government's 'FirstBuy' scheme where the housebuilder and the government each pay 10% of the value of the house, and i only need to find a 5% deposit. (obviously its a little more complicated than that but thats not the reason for this post)

Reading through the government's FirstBuy information guide, it states that I will have to see a Independent Financial Advisor who will then deem whether i am eligible for the scheme and what Mortgage i can get, but the guide says:

You mortgage will be based on a multiple ranging from three to four times your household income. Your local HomeBuy Agent will also work to a guidline to ensure that your monthly costs (mortgage, service charges, and fees) are no more than 45% of your net disposable income.

But there is no definition of 'net disposable income'. Is this just my income - tax? Or do they mean income-tax-average utilities-credit card etc etc.

Derivative

"Disposable income" seems like a strange term here. I would generally class disposable income as income AFTER housing costs.

Presumably they do want after utilities, car, debt payments etc as that's your actual affordability measure. No good them giving you a 45% mortgage if you have 30-40% going on other stuff already :P

Bigmoney2

A few years back (before the credit crunch) I got a mortgage based on affordability. They wanted to know about any other loans, or car finance. This criteria seems to be making a come back, but they may now want to estimate things like council tax, utilities as well, may even need to know travel costs to work, food, clothes etc as lending criteria are much tougher now.

Thrugelmir

Davewils wrote: »

But there is no definition of 'net disposable income'. Is this just my income - tax? Or do they mean income-tax-average utilities-credit card etc etc.

Draw up a personal budget of all your expenditure (on a monthly basis).

That'll give you an indication of the amount of spare money you have left.

Davewils

Thrugelmir wrote: »

Draw up a personal budget of all your expenditure (on a monthly basis).

That'll give you an indication of the amount of spare money you have left.

Oh i have this, but it's what THEY class as "disposable income" which is in question. I mean, i dont count petrol+food as part of my "disposable income" but i bet that the banks might.

Looking at various definitions online, it seems to just mean income-tax.

But this just shows how people see it as meaning different things.