Mortgage Calculator Gross - But I Pay No Tax

MoneyBob

I want to work out how much mortgage I can get but the calculator at the lender I want to use (and many others) all want to know my gross income. But my gross income is the same as my income because I don't personally pay any tax. My income comes from a below threshold wage, and dividends. Dividends are taxed at source.

I'm sure I should be able to borrow more than the calculators are saying.

If I apply in person will the lender take this into account? Have an appointment in a few days time so I'll find out definitely then - but figured forewarned is forearmed and you lot seem to know _everything_

danthemoneysavingman

you should go through a specialist broker, I've used http://www.contractormoney.com/ before, they can help you best given your brief description

amnblog

Once again, the message is that online affordability calculators are no good unless you know how each one works.

Let_Us_See

MoneyBob wrote: »

But my gross income is the same as my income because I don't personally pay any tax. My income comes from a below threshold wage, and dividends. Dividends are taxed at source.

Its the same. Just divide by 12 if the calculator requests a monthly net income.

MoneyBob

It asks for both. Monthly net, and annual gross. Fiddling with the inputs shows the maximum amount lendable is based on the annual gross rather than the monthly net. For some reason.

Suspect amnblog is correct.

kingstreet

Obtain your last three years' SA302s from HMRC.

Average the three "total income received" figures and enter that in the calculator in the gross box.

The SA302 figure is grossed up by the tax on the dividend, so it's correct for the lender calculator.

Divide your annual average by twelve to get the net monthly amount.

amnblog

You should also be aware that the results of many of these calculators will change in the next three weeks due to changes in legislation.

For example, one major lender is lowering the limits on it's affordability stress test by 17%