Do they consider tax credits? Deposit for second home?

skintsaver_2

Hi all

I'm thinking of putting my house up for sale but before I do I would like to get an AIP. My earnings are £10,167 but when I factor in tax credits and child benefit it takes me to £16,500

Would a mortgage company include my tax credits in the decision as to how much mortage i could have?

A local agent has told me how much my house is worth and should sell for (he is a friend) and once taking out the fees etc I would be left with £45,000. Could I use this as a deposit if I was in a chain buying situation or would I need to find the money from elsewhere?

I have only ever bought the house I live in son don't know how it works when buying a second home.

Thanks very much for your help

csgohan4

Do you have a mortgage? and does the 45k take into account of this if you do?


What kind of price bracket were you aiming for?

skintsaver_2

Yes I already have a mortgage. The 45k is what would be left after the sale of my home and paying off the outstanding mortgage on my house plus fees etc.

I'm thinking of buying a house around 100-110 with the 45k as a deposit

skintsaver_2

Can anyone advise me please?

csgohan4

talk to a broker, every case is different

skintsaver_2

I have found a local broker but I just wondered whether child tax and working tax is taken into account as an income otherwise there is no point me trying to obtain a mortgage at the moment

Are there lenders that do consider it?

leveller2911

skintsaver wrote: »

I have found a local broker but I just wondered whether child tax and working tax is taken into account as an income otherwise there is no point me trying to obtain a mortgage at the moment

Tax credits can be reduced in the next budget so is it a good idea to apply for a mortgage based on a benefit that may well be cut in the next 12 months?..

Just a thought to consider whether or not you would be sailing too close to the wind.

skintsaver_2

In the November statement they stated tax credit cuts were not happening in the April budget.

They may still happen but my wages should increase in the next year or so which would make the tax credits drop anyway.

My monthly outgoings are really low also. Altogether I pay out £800 which includes current mortgage, council tax, utilities, food shopping etc

isabelle1903

There are buy-to-lets that take into account tax credits as we've just got one. Your mortgage adviser should know the ones to try - ours is with Birmingham Midshires.

ecsb

I was refused a mortgage on the basis that tax credits would not go on forever.

leveller2911

isabelle1903 wrote: »

There are buy-to-lets that take into account tax credits as we've just got one. Your mortgage adviser should know the ones to try - ours is with Birmingham Midshires.

Its a strange country where somone is judged to be poor enough to be in need of benefits and receive taxpayers money through Tax credits etc but are wealthy enough to buy property to rent out on a BTL mortgage..........