Lender that is not too strict on affordability criteria?

stuckonbenefits_2

Hi guys,

I'm aware that all lenders are different and I know that most lenders have now changed their rules regarding the affordability criteria, but which one in your experience is so far the least strict?

I'm asking this for my 40yr old cousin and his wife and the reason I ask is because he is thinking of moving house and borrow some more...here is his current situation:-

Current Setup and Requirements:-
1. Owes Nothing on current home worth approx £120k,
2. Would like to buy a house close to £200k, so will need to borrow additional £70k for 25yrs
3. Has £10k deposit too
4. Clean credit file, although experian score was I believe 800+

Income:-
1. Working on 18k salary
2. 15k in tax-credits + his disability benefits

Outgoings:-
1. No money owed on credit cards or loans etc
2. Any spending such as bills, food etc on family and kids is approx £600 per month or less

If I've missed out any info, then please do let me know.
Any help would be much appreciated.

tomtontom

Earns £18K and gets another £15K in benefits? :eek:

HappyMJ

It's not affordability that's the problem it's getting a lender to take benefits into account in the calculation. The benefits are usually paid to support a dependant or to pay for the extra costs of having a disability so an entry will be made on the expenses side to cover that....and it'll be more than £600 a month. However, you should be able to borrow an amount very close to the amount you are asking for. I'd be speaking to a broker to find out your best options.

stuckonbenefits_2

@ tomtontom - What he gets is his entitlement...nothing more, nothing less.

@ HappyMJ - Thank you very much for that information. The reason for posting on here was to get an idea as lenders are different. For example I've noticed that halifax seem to lend less via their affordability calculators than Nationwide.

ACG

£15k in tax credits - are these child tax/working tax?? How many kids are there? How old are they?

What disability benefit is it? Is it guaranteed forever or is it for a set period?

stuckonbenefits_2

It's all of them combined - working tax credits, child tax credit, child benefit and dla.

He has four kids and he's been in the same employment for about 5-7 years.

The DLA is permanent due to physical disability, however it gets renewed every 2-3 years.

ACG

I dont think your going to get a lender to take the DLA in to account.

So I would be basing any borrowing amount on the CTC, CB and WTC + income personally. It might be possible to get DLA taken into account but I cant see it happening.

Either way, I think I would go to a broker. You could find yourself doing a lot of running around and not getting it through without a bit of arm bending of the underwriter.

HappyMJ

The calculators don't mean anything if he really can prove he is saying he is spending what he says he is. He must be realistic he cannot say he spends £23 per person a week on all household bills (gas, electricity, water, tv licence) including travel costs, holidays, days out, clothes for everyone as well as groceries including not only food but personal toiletries as that figure will be well below the one they have and they'll then estimate an average figure which may be much higher than what he really spends.

You need to find out exactly how he figured out he only spends £600 a month to support a household of at least 5 or 6. That's pretty hard.

stuckonbenefits_2

@ ACG - Right I see. Any recommendations of what broker he should go to?

@ HappyMJ - I have no idea mate.

Thanks again.

ACG

Not allowed to recommend brokers.
I would just say to do a search on google or something for someone local.

stuckonbenefits_2

Thanks ACG. I've just asked him and he's just used a calculator to check his real outgoings:-

http://www.thisismoney.co.uk/money/bills/article-1633404/Household-budget-calculator.html


His figure is actually just under £1300 per month outgoings, so please accept my apologies for that mistake. Even after taking this into consideration, he's left with well over a £1000 hard cash per month.