anyone with any experience of FD know what they take off for childcare?

pamelab21

looking to move and we are currently with Britannia who do take childcare into account but will allow tax credits and child benefit.
I am interested in the FD 10 year fix and we are looking at a 110k mortgage on a possible house value of 220k but have called them and they have advised that they do take childcare into account but not tax credits or child benefit. Does anyone know how much childcare can decrease the amt of loan offered? I don't want to start calling all these places and get credit checks carried out when in the end they will say computer says no!


(please can I stress that I am not being irresponsible. we have savings, if we were stripped of the tax credits that we do get the figures still add up, we could still afford the house and the childcare bill will drop in August and then go totally when they start school in 2017. Just finding what lenders do and do not take into account varies so much!)

kingstreet

Lenders deduct the monthly cost of childcare.

That seems far too simple an answer you surely could have seen for yourself, so I'm asking myself what else you might have meant?

JimmyTheWig

kingstreet wrote: »

Lenders deduct the monthly cost of childcare.

That seems far too simple an answer you surely could have seen for yourself, so I'm asking myself what else you might have meant?

To play devil's advocate, what do they deduct this figure from?

In other words, if they will lend up to 3x gross salary and the OP's gross joint salary is £40k they would lend £120k.
But if the OP paid out £100 a month in childcare, what would they deduct this £100 from?

kingstreet

Don't think about income multiples these days.

Enter the income into the affordability calculator, then add the cost of childcare and you'll then see the difference.

Best way to think of it is in monthly mortgage payment terms. If you pay £500 per month for childcare and (eg) the calculator sees every £1,000 you borrow as £10 per month, that means you would lose £50,000 from your borrowing ability (£500 / £10 = 50 x £1,000).

pamelab21

sorry couldn't get online last night. thanks for your replies, yes sorry I did mean how much do they deduct from what they can lend you and not what do they deduct from your monthly outgoings.
I can't seem to find a calculator on FD website so think I am just going to have to phone them and run through a few things to see what they say. Just don't want any credit checks run for them to say no!
thanks all

kingstreet

http://www2.firstdirect.com/1/2/tools-and-guides

pamelab21

thanks but that just gives me income multiple.
Just called FD and went through an affordability check with them. Although the website says we could borrow up to 142k, we are looking for 110k, allowing for the 400pm childcare that we pay (we have no loans, cards etc) that figure dropped to 67k!
so frustrating as we are looking at a 50% ltv and know we can afford it, costs will change in aug and then go completely in two years.
Guess we will stick with Britannia as they have said they could help and will include help with childcare.