Natwest mortgages and tax credits?

Danniella

Hi there,

Does anyone know if the Natwest or Halifax are one of the lenders that take Tax Credits into consideration?

I have 1 default on my credit file from 2010 (still paying this off), Experian have it down on report as satisfied, Equifax have it as settled and it doesn't appear at all on Noddle/Callcredit which I found bizarre considering I am still paying it.

Anyway broker said as my husbands credit history is clear, we could get the mortgage in his sole name but unless the lender take Tax Credits into consideration, it just wont give us enough.

Broker also said that if we apply for a mortgage jointly, we will probably have to use an adverse credit lender or wait for the default to drop off in another 3 years time.

Many thanks for any advice in advance

javorb

i had mortgage app done with nationwide with same situation as you ,the underwriters accepted tax credit then after higher valuation than expected they froze app as they DONT accept tax credit from married couples doing single mortgage !.if you do a joint app or are a single parent they accept ,my broker has been fighting my case and has got no where !we have 4 kids and one has a disability so our tax credit award is quite high ,so he has asked if they cant accept tax credit how can they use the 4 kids as dependants ,we are just waiting on word,i have changed the child benefit into my name and that will be enough to get my amount.check under benefits,http://www.nationwide-intermediary.co.uk/lendingcriteria/general/income

Danniella

javorb wrote: »

i had mortgage app done with nationwide with same situation as you ,the underwriters accepted tax credit then after higher valuation than expected they froze app as they DONT accept tax credit from married couples doing single mortgage !.if you do a joint app or are a single parent they accept ,my broker has been fighting my case and has got no where !we have 4 kids and one has a disability so our tax credit award is quite high ,so he has asked if they cant accept tax credit how can they use the 4 kids as dependants ,we are just waiting on word,i have changed the child benefit into my name and that will be enough to get my amount.check under benefits,http://www.nationwide-intermediary.co.uk/lendingcriteria/general/income

Many thanks for that. Yeah from their terms and conditions, they seem pretty straightforward on the tax credits situation, both names on tax award and both names on mortgage app - they will accept. No good for me because of my 1 default

kingstreet

I don't know of a lender which will take joint tax credits for a sole application, if they know they are joint. However, if you were able to evidence the tax credits being credited to his sole bank account, they may not ask for the award letter.

Speak to your broker about this.

BTW, what's the loan to value? Size of default?

javorb

i do not understand how affordability calculations can be used if they dont take tax credit or even a % for a married person doing a single mortgage ,in my instance my tax credit award is higher than the mortgage payment would be !

Danniella

javorb wrote: »

i do not understand how affordability calculations can be used if they dont take tax credit or even a % for a married person doing a single mortgage ,in my instance my tax credit award is higher than the mortgage payment would be !

Absolutely! If you find one, please let me know

mummyroysof3

Natwest took ours into account but then it's a joint claim for a joint mortgage so that problem doesn't help you sorry

Simon_gloster

Using tax credits to boost lending amounts is frowned upon especially if the maximum needed is just surpassed based in using these.

Lenders will then ask the age of the children, look at the term requested and adjust accordingly once the credits stop if ever fully underwritten.

If it flies through no questions asked then all ok but be mindful if they ever getting stopped or are reduced.

Typically inly 50-60% if the full amount is used un the calculation.

javorb

Simon_gloster wrote: »

Using tax credits to boost lending amounts is frowned upon especially if the maximum needed is just surpassed based in using these.

Lenders will then ask the age of the children, look at the term requested and adjust accordingly once the credits stop if ever fully underwritten.

If it flies through no questions asked then all ok but be mindful if they ever getting stopped or are reduced.

Typically inly 50-60% if the full amount is used un the calculation.

our tax credit is £840 4 weekly ,this is not counted but £242 child benefit is enough to get what i need so the tax credit it is not being relied on to get a big step towards mortgage amount ,my point is why is there a difference they either take tax credit or they dont! is a single parent more reliable ?

javorb

Simon_gloster wrote: »

Using tax credits to boost lending amounts is frowned upon especially if the maximum needed is just surpassed based in using these.

Lenders will then ask the age of the children, look at the term requested and adjust accordingly once the credits stop if ever fully underwritten.

If it flies through no questions asked then all ok but be mindful if they ever getting stopped or are reduced.

Typically inly 50-60% if the full amount is used un the calculation.

who frowns upon tax credits ,the dishonest bank clerk !,income is income ,in my case we have a child with a disability that is why my tax award is quite high ,and is why my wife does not work as she is his carer!we cant all earn £50k +a year so tax credit does help us live and is counted in my household as income!

Simon_gloster

Read the post, if it's tight in affordability using them then lending should be cautious. I wasnt referring to your mortgage....