This could be for a number of reasons – perhaps one member of the couple has adverse credit history that could impact the application, for example, or it could just suit the plans of the applicants to maintain separate finances.
If both members of the couple plan to live in the property and only one is named on the application, the other member will be identified as an adult dependent. So, what difference does it make to affordability?
Research by MBT Affordability has shown that the difference in affordability where both members of a couple are named on an application compared to where one applicant is treated as an adult dependent can be a lot higher than you might think.
We tested a straightforward case of a married couple with a single income, one child, low debt and an 80% LTV loan requirement. A conventional joint application enabled the couple to borrow nearly a quarter more (24%) compared to presenting the case as a single applicant with an adult dependant.
Large differences were common amongst both mainstream and specialist lenders but most surprisingly, the lenders offering best affordability changed significantly and so it was impossible to predict which lenders were prepared to lend the most money in one scenario based on those with the most generous affordability in the other scenario.
This is yet another example of how tricky it can be to identify the best lender for an unusual case, and demonstrates the importance of thorough and accurate affordability research – which can be carried out in just a few clicks with MBT Affordability.
