Income for Mortgages

XTwinkletoesX · 9 June 2014 at 8:20PM

Hi

Can anyone please advise why mortgage lenders will not include Adoption Allowance together with my full salary? Fostering allowance is allowed but not AA so I'm confused as to why not.

I currently have a mortgage and wanted to upsize but have been told by most lenders that they will not include this weekly payment.

Thank you

ACG · 9 June 2014 at 9:10PM

Fostering allowance is not allowable with all lenders - I dont think many would accept it would they?

How is/are the child(ren)?

XTwinkletoesX · 9 June 2014 at 9:42PM

Lloyds, L&C, Nationwide, Halifax & Santander accept fostering allowance.

My children are 8 (who I receive AA for) and 16

ACG · 9 June 2014 at 9:51PM

L&C?

How long will they pay the allowance for?
How old will the children be when it stops?
How long is the mortgage for?

If some of the allowance stops in sat 2 years for instance and the mortgage is for 20 years then realistically you can see why as the vast majority of the mortgage is going to be reliant on an income that will not be there.

That does not specifically answer your question as to why one is acceptable and another isnt but it might help to answer why AA isnt ?

XTwinkletoesX · 9 June 2014 at 9:58PM

Thanks for your reply.

L&C -London & Country.

The AA is payable for another 10/11 years paid by the Council so guarenteed, along with tax credits/child benefit. My mortgage is for 24years. Fostering allowance is only received when a child is placed with you AA is until the child is 18 which is regular income unlike fostering allowance, which is why I'm at a loss.

ACG · 9 June 2014 at 10:36PM

L&C are a broker, not a lender.

Will the amount you get drop then when the eldest turns 18?
Also you say its payable for 10/11 years but stops when the child is 18... as your youngest is 8, that must be closer to 9-10 years?

Thats less than half of the mortgage term.

I genuinely can see why lenders would not accept it in this scenario. If it helps, whilst some lenders will consider certain types of income/benefits - it does not mean they will definitely accept it in all circumstances.

I have just done some quick reading and it seems adoption allowance is based on how the council has interpreted the rules surrounding it - ie it can vary from postcode to postcode. That could be a reason behind it?

Pedent · 13 June 2014 at 5:14PM

I believe that Adoption Allowance is also discretionary, and often subject to an annual review at which it could be withdrawn. That might be part of the reason why lenders are reluctant to take it into account.