income multiples question

kunekune

Hi,

Background: we are wanting to buy within the next year, all things being equal. At the moment, we have a joint income of around £75K, with mine being a bit over half of that. The increment system and a staged pay increase agreement in my job means that, even without promotion, I'll hit £43K in a year. DH is currently employed by a 'major financial institution' but hates his job and would prefer to be an independent contractor (IT). We are older and don't want a big mortgage anyway (ie, we'll buy cheap, we don't have a big deposit). We think we can manage relying on my salary alone to raise the mortgage, so in theory where and how OH works shouldn't be relevant.

However, when I filled out online 'how much can I borrow' forms, they didn't seem to cover the situation where you have two incomes but only want to rely on one for the mortgage application. If I said mine was the only income, it offered us more than if I said there was an OH but he didn't earn anything, presumably because he was then assumed to be an expensive responsibility. But we couldn't pretend OH didn't exist, since it would be a joint mortgage and the house would be in joint ownership. Is this just a glitch in the online software or is there some policy from the lenders that takes 'dependants' into account?

Thanks in advance - there will be a lot of questions over the months, I think!

apk1

This looks like a lender using affordability rather than income multiples, they take into account dependants, and assumes you are paying for them, in your situation, although a lot of lenders won't accept your oh's income immediately, presumably he will still be bringing in some funds, and so will not be fully dependant on you.

Depending on how the multiples stack up, I would suggest using a lender who uses "old fashioned multiples"

kunekune

That makes sense. Thanks. Another question: do state benefits such as child benefit and disabled living allowance (for our son) get put into the income equation?

herbiesjp

kunekune wrote: »

That makes sense. Thanks. Another question: do state benefits such as child benefit and disabled living allowance (for our son) get put into the income equation?

Some lenders will take that insoem into account and others will not (if it is paid to the applicants of the mortgage)

Some will take all of it into account and other a certain percentage