Hire purchases and nursery fees

kakalokia

Hi everyone.

Just got a question regarding the "Outgoings" section on some mortgage applications (or agreement in principle ones).

There are usually two questions on the Outgoings section, on the lines of:
Monthly payments for personal loans or hire purchases?
What are your monthly childcare costs?

For the first question the only thing that I think is applicable for me is the car finance. I do have a car finance under my name, however my dad is the one paying for it, so nothing comes out of my account for the car finance. Does that mean I don't have to declare that? Do I need to explain that the finance is in my name but my dad pays for it, or is it simply saying I don't pay for any hire purchases?

Similar situation for the second question. Our child goes to nursery and we get nursery bills in both our names (me and my wife). However the nursery fees are paid by my parents. Again is that something we need to declare, or say that we don't pay any nursery fees?

Thanks.

ACG

You need to check both with the lender(s) you are thinking of using. There is no cut and dry answer, some may ignore both, others none and others one or the other.

If I was the broker on the case, that is what I would be doing. Rather than doing a decision in principle, why not do the affordability calculators and see if it passes affordability with the commitments in place? Quicker amd no chance of harming your credit file.

AnotherJoe

Do you mean the finance is in your name but your dad pays direct to the finance company every month?

If so, and i dont know the answer here, but its seems very likely that you will be on the hook for this and it will be counted as an outgoing, simply because you are liable for the finance. In effect, you have additional informal income every month that could stop at any time, that just happens to match your car payment.

kakalokia

Thanks for your reply.

I have done an affordability calculator and there is a big difference between putting those commitments and not doing so, hence why I wanted to ask

For example without those commitments I may get 155,000, however with them it only gives 109,000.

I guess the question is do I need to declare them at all, or just explain the situation and see what the lender decides. Or do I not declare them and only explain if the lender sees the car finance under my name through the credit check. Is not declaring them considered lying; even though I don't pay towards the commitments.

Thanks.

kakalokia

Thanks Another Joe for the reply.

Yes that's exactly the case.

How about the nursery bit? There is not finance agreement there as it's just paid monthly through the post office. The only thing is that the bills are in my and my wife names.

Thanks.

ACG

You ask the lender before doing anything what they would want you to do.

If you do not declare it, it could be deemed as mortgage fraud. If you do declare it unnecessarily, then you are reducing your loan amount for no reason.

I have known lenders to ignore costs that are met by other people, but I have also known lenders to take the opposite view.

kakalokia

Thanks AGG.

By "lender" do you mean a broker, or the actual bank?

Thanks.

ACG

If you are going through a broker, they will do the research and let you know how much you can get.
If you are doing it directly, then you will need to check with the banks/building societies etc. I tend to say lender as banks is there are more than just banks/building societies who lend money.

kakalokia

Thanks very much AGG, appreciate the info.

minimike2

Can you afford to buy a house if you are still relying on your parents to pay your costs of a car and childcare?

kakalokia

minimike2 wrote: »

Can you afford to buy a house if you are still relying on your parents to pay your costs of a car and childcare?

Yes I can based on my salary and the savings we're able to make every month (which can be re-purposed to pay for a higher mortgage). I wouldn't think about buying a new house if I know I couldn't afford it.

Thanks.