Mortgage borrowing amount - Housewife

negs

Dear Blog contributors,

I wanted to know your opinion on the following
I am in full time permanent job having a salary of around 50K (2 children). My wife is a housewife. We are buying a house and we were checking online mortgage calculators to see how much we could borrow.

What i found is that if i apply on my own entering my salary (1 applicant, 3 dependants) it shows around 223k as the amount we could borrow.

However if i add my housewife (no salary) and 2 dependants the amount reduces to just 147k.

Does that mean that we can not add a housewife with no salary to a mortgage else it will affect the maximum we can borrow. Seems a bit strange considering that there is no difference between the two scenarios (1 applicant: 3 dependants, 2 applicants (one being the housewife): 2 dependants)

Can some respected board members please give their opinion based upon their experience as this should be a quite common scenario having house wife's (zero salary) included on the mortgage with main applicant.

Thanks,
Negs

Beckyy

Not sure but bear in mind that if it's in your name alone then the deeds will need to be too, the property deeds need to match those on the mortgage. The calculators aren't always spot on the figures may vary totally with each lender in both situations.

negs

Thanks. I understand as regards the deeds. Both names will be there. I have same understanding.
However my query was more related to - if it will make a difference to the maximum amount lender will let us borrow.

Can some mortgage advisor on this forum kindly let us know as this must be quite a common scenario they must be dealing on a day to day basis.

Thanks

Let_Us_See

One of the problems with mortgage affordability is there are no common rules. Every lender has their own idea of assessing affordability and financial dependents is just one area of concern, and as you have experienced, it can be very confusing. This problem is currently exacerbated by lenders introducing new affordability models in the run up to full MMR implementation (26/4/14) together with the fact that not all lender's affordability/borrowing calculators have been updated.

ACG

Some lenders will insist that your wife goes on the mortgage rather than a dependent.

The way they calculate things will usually differ between how many applicants and how many dependents - crazy to some extent but thats their choice i suppose.

But its up to you/broker to play the system(s) to your favour without breaking the rules.