This policy applies to all customers applying for a Hastoe shared ownership home. To ensure that potential buyers are able to afford and sustain home ownership, all applicants will have their affordability assessed. This will be based on a monthly minimum surplus income requirement.
The minimum amount of surplus income is the amount that a shared owner should have remaining at the end of each month after housing costs, any other commitments and expenditure have been accounted for.
These costs will be confirmed as part of the affordability assessment carried out by a specialist mortgage advisor. The specialist mortgage advisor is qualified to carry out such an assessment and will consider all elements of the applicant’s income and expenditure using a budget planner, similar to what is used by lenders offering products in the open market.
Hastoe’s monthly minimum surplus income requirement is 10% of the applicant’s net income. This amount has been determined using a similar methodology from mortgage lenders and advisors and based on our knowledge of household incomes. Hastoe have chosen to incorporate a percentage monthly minimum surplus income as it can be used across the wide geographical areas that Hastoe serves, where a monetary surplus figure would not be relevant nor comparable.
The applicant’s net income is calculated the following way:
A. Gross Income
- Gross monthly income to include relevant amount of any overtime, commission or bonus as determined by the advisor
- Any Universal Credit or benefit income
- Any guaranteed maintenance payments
B. Gross Deductions
- Income tax
- National insurance
- Pension Contribution
- Student Loan
- Other payslip deductions
C. Commitments
- Credit commitments to include personal loans, PCP, HP etc
- Credit and store cards
- Childcare costs
- Care costs
D. Housing costs
- Rental figure (this will be stress tested and calculated based on rent increases over the first 5 years after completion)
- Service charge
E. Net Income for Mortgage Purposes
E is the remaining income once B, C & D have been deducted from A
F. Mortgage Payment
The indicative mortgage payment determined by the advisor. This should not exceed 30% of ‘E’.
G. Essential Costs
- Council tax
- Utilities
- Food
- Fuel & travel
- Insurances
- Other
H. Surplus Income
This is the figure remaining once F & G have been deducted from E. This figure must meet Hastoe’s minimum surplus income requirement of 10%.
If the customer does not meet the requirements in this policy, Hastoe will consider the property to be unaffordable to the customer.
If you would like this information supplied in another format and/or have any questions above the above, please contact us at sales@hastoe.com.
