How is affordability assessed?

MoneyEM

When inputting in "committed expenditure" it says you should leave out stuff like bills and petrol etc as it will be calculated automatically.

How does it work if I don't drive? Do I not put down my train ticket (commute, £230 monthly) as a committed outgoing if they are going to assume that I drive a car anyway?

minimike2

These kinds of expenses are covered by using ONS averages.

Zero point in even saying what you do and don't do / spend, as it will make no difference, unless you are using a lender who doesn't use ONS figures and assesses based on every minute thing you spend.

Who is the lender? That will determine if your train ticket will be included in their assessment using ONS already. Have you asked them?
These are the kinds of things where you really should use a mortgage advisor if you are unsure as DIY can result in disaster if you get it wrong.

MortgageMamma

ONS = Office for National Statistics https://www.ons.gov.uk/

MoneyEM

minimike2 wrote: »

These kinds of expenses are covered by using ONS averages.

Zero point in even saying what you do and don't do / spend, as it will make no difference, unless you are using a lender who doesn't use ONS figures and assesses based on every minute thing you spend.

Who is the lender? That will determine if your train ticket will be included in their assessment using ONS already. Have you asked them?
These are the kinds of things where you really should use a mortgage advisor if you are unsure as DIY can result in disaster if you get it wrong.

Normally affordability calculators don't ask for your travel expenses, but with leeds building society on the website it says to include other significant costs such as a train ticket for a commute from swindon to London.

Mortgage advisor didn't mention including travel in the application, only student loan and service charges on the new flat. I just didn't want this to be something that has been overseen when applying...

minimike2

Have you said the above to your advisor?

Looking at what they are asking for then yes I would personally class that as a significant travel cost and would include it.

MoneyEM

minimike2 wrote: »

Have you said the above to your advisor?

Looking at what they are asking for then yes I would personally class that as a significant travel cost and would include it.

Yes he has said he will confirm with them before we apply, but has said that there is an automatic calculation done for travel anyway so I think this will be okay since I don't have the running costs of a car to factor in too.

kingstreet

The question here is what is your non-commuting travel cost?

You have £230 for commuting, but if the lender is already assuming £200 a month using ONS stats, you are effectively double entering to £430 if you declare it but have no other costs.

As an example, Nationwide uses ONS stats but demands an entry for travel. We enter £50 believing that covers the bulk of commuting for those who run a vehicle for "SD&P" who will live fairly close to work.

Just be careful not to shoot yourself in the foot, or have your broker do it for you if they simply declare it without thinking.

Any extra £250 of costs may see you lose £30,000 to £50,000 borrowing power.

MoneyEM

kingstreet wrote: »

The question here is what is your non-commuting travel cost?

You have £230 for commuting, but if the lender is already assuming £200 a month using ONS stats, you are effectively double entering to £430 if you declare it but have no other costs.

As an example, Nationwide uses ONS stats but demands an entry for travel. We enter £50 believing that covers the bulk of commuting for those who run a vehicle for "SD&P" who will live fairly close to work.

Just be careful not to shoot yourself in the foot, or have your broker do it for you if they simply declare it without thinking.

Any extra £250 of costs may see you lose £30,000 to £50,000 borrowing power.

Thank you. My advisor has spoke to the lender we intend to apply to, and they estimate that an average person uses 10% of their salary, as my only travel costs are under this I won't need to declare it as extra. :T