What else other than salary count as income (mortgage)?

[Marghe87]

We have a family income of around £110K (two salaries). Based on halifax calculator, we could borrow around £415K, because we have high outgoings with nursery fees.
i do get a bonus on top of that of around £6K although it is not guaranteed (but I get it every year)
is there anytjing else that counts towards income, for example tax credit on childcare or flexible benefits cash from my employer?

Do not so

Halifax let you borrow 5x your salary (or at least they did in 2021 when we bought our house).

But it's more based on your disposable income rather than multiples of your salary these days as well..

If your childcare ends this year, would it not make more sense to wait till after then?

It can vary according to the mortgage provider so you would need to check

The banks have tightened up things though with the interest rate rises. Also deposit size can make a difference.

We put in the amount we paid on childcare on all the calculators as the amount we paid with the tax deducted (ie. The actual amount that goes out of our bank account, not the amount that the nursery bill is). That then takes that into account.

I agree if you're relying on that though, it's probably not a great idea.

The amount you get via tax free childcare account doesn’t count as income, but it reduces the childcare bill so the amount you tell the mortgage company you pay bf or childcare is the balance you pay towards the childcare, not what you’d pay if you didn’t get the top up.

You can’t include income which isn’t guaranteed (commission or bonus).

Yeah, as others have said, surely your mortgage offer has been calculated based on what you're actually paying for childcare, not what it would have cost of you weren't running it thought tax free childcare?

(Calculation, not offer. But you know what I mean.)

You can’t include income which isn’t guaranteed (commission or bonus).

You can

@safeplanet no, no debt

@Persipan yes makes sense - it’s just that it’s bits here and there that they refund us so we don’t tend to pay equal amounts every month iykwim

Just to clairfy, I am
not relying on the 2K of tax free childcare to borrow more but if that plus my bonus was considered for example, I might be able to borrow an extra £20K which, given we are ftb, would make a difference

Hey, I'm a broker, in your case I would be using your salary and your bonus as you receive this every year, most lenders with a bonus will use the average of the last 2 years' bonus but if the most recent year is less than the average they would go off that, if you have any other questions let me know. Also, bare in mind that all lenders work out affordability differently so what Halifax will lend you could be different from another lender based on the same income.

I would declare the amount you put in your tax free childcare as the cost of childcare not the bill you are sent. Also if your child is nearly 3 you may be worth waiting for that. Any chance you can reduce nursery by a day a week for a few months to get the bill down?

Bonuses generally don’t count, as they are generally performance related, so not guaranteed.

Yes my mortgage company took the last 3 years bonus and used an average.
Like OP my bonus is not guaranteed but I get something each year.

@Hack221 thank you!

I think we also provided info on our pensions when we bought our current house and that helped as well

Maintenance
Dividends
Universal credit
Tax credits
Income from property

@YourGazeHitsTheSideOfMyFace i wasn't confused the op called it tax credits child care. I know exactly what tax free childcare is. Tax free childcare is not income it's part of your tax back so no obviously it doesn't count. However your childcare costs so your affordability is higher.

As my nursery fees were stopping in 3 months from when I applied, my lender (Santander) disregarded it entirely. That helped as the monthly cost was £1,500 for one DC, so it reduced my affordability by some margin.

By the time I completed on my house, DC1 was in Y1 and DC2 had been in reception for a couple of months.

My bonus is technically performance related but as I could show the same % for the last 7 or so years they were quite happy to accept it.

Can you also count savings interest as income? I have National Savings Income bonds which these days pay a interest at a decent rate every month.

It is rarely a good idea to take out the maximum mortgage amount out a bank will lend.
Check realistic affordability first.

I know some people have topped up their tax free childcare account with 4 or 5
months worth of childcare fees as a single payment before they have to submit their 3 months bank statements, so there will be less money going out of their bank during that time for childcare fees. Not saying it's right to do that, but certainly I know some people do.