Childcare costs - declare or not?

Ace1979

Hi

I'm in the process of looking for a mortgage, and we have 3 kids in nursery, so pretty significant childcare costs.

I've done a budget, and even despite the childcare costs, we can afford repayments on the size of mortgage we want - and have about £900-£1000 left over per month. Not too shabby really!

BUT...our current mortgage company (Nationwide) asks for childcare expenses and then significantly decreases what we can afford to borrow - below the amount we need.

So my question is do we HAVE to declare childcare expenses? Surely if we think we can manage then it's up to us?

ACE

ConfusedofYorkshire

yes you do need to put it. For them it is about managing the risk of giving you money and they need to be satisfied that you can repay.

i think i'm right in saying that not all lenders ask about childcare costs though.

Thrugelmir

Ace1979 wrote: »

So my question is do we HAVE to declare childcare expenses? Surely if we think we can manage then it's up to us?

Decision is the lenders. Not merely a question of childcare costs but all other related expenditure.

People on the whole are far too optimistic when it comes to budgeting for household finances. Making no allowance for contingencies being the major one.

Lenders are also factoring in an interest rate rise. As at some point money will become more expensive to borrow.

Ace1979

£1000 a month feels like a pretty big buffer for any optimistic budgeting. And we're going for 3 years fixed rate - in 3 years our childcare bill is next to nothing as all 3 will be in school.

But the online calculators don't let you say that ;-)

I've just re-done the sums, and taking into account childcare vouchers, it's better, we can cover what we need to.

Now to haggle the house down in price so it's easier!

Kimmy1980

I think you definitely must declare your childcare costs we had the same problem with nationwide despite being easily able to afford what we requested because of the childcare costs they offered us 9000 less than we needed. We went with Halifax In the end who didn't care about childcare costs and offered us more than we needed.

Thrugelmir

Ace1979 wrote: »

£1000 a month feels like a pretty big buffer for any optimistic budgeting.

How much are you looking to borrow?

Ace1979

We're looking for 440k to buy a 685k house.

danielanthony

I'd go with Halifax as they will also discount any debts if you promise to pay them off at completion. They also lend up to x4 joint income.

I found them to be the most flexible lender by far.

Gordon_Hose

We declared our childcare costs because we take advantage of childcare vouchers, which are clearly shown on our payslips as a pre-tax deduction.

I'd say definitely declare them.

kingstreet

Gordon_Hose wrote: »

We declared our childcare costs because we take advantage of childcare vouchers, which are clearly shown on our payslips as a pre-tax deduction.

I'd say definitely declare them.

Quite. Visible childcare vouchers will see a request for total childcare cost and possibly bank statements to prove your answer is truthful.

Ace1979

Very good point, I hadn't thought of that.

I shall retreat into my grumbly corner! Or just use Halifax!