Barclay- Net or Gross income

[Aussie]

I have read on this forum that Most French banks will lend on 33% of your gross (pre-tax) income. So I was feeling confident that using barclays that they would apply their assessment on my Gross income as well. To my amazement they applied it to my Nett income and declined my application!

Can anyone confirm that Barclays use the Net income or gross income figure? I assume at the moment that they have made a mistake, but would like to know where I stand before I go into bat!

Any feedback greatly appreciated

[Coral]

Try GE Money Bank.  They were very reasonable with me when Abbey Nat and Barclays rolled up with laughter at my loan application.

Admin.  If this is classified as an ad, I apologise as it is only meant to be of help.

Coral - soon to be in Ariege  ..... July I  hope!!

[Teamedup]

Not quite as simple as that in France, but what is.

For us, everytime we apply for a loan they want our net income. This ofcourse is pre income tax, as we don't have PAYE, (pay as you earn), but they also want to know what we paid in income tax the previous year.

[Lollie]

[quote]I have read on this forum that Most French banks will lend on 33% of your gross (pre-tax) income. So I was feeling confident that using barclays that they would apply their assessment on my Gross inco...[/quote]

Barclays in France or UK, certainly in UK Barclays as responsible lenders lend on affordability, I would imagine that applies in France also. 

[Aussie]

Lollie,

The point of your post being?

That somehow by assessing incomes on an efter tax basis rather than pretax gives them a more responsible tag? That I am being irresponsible going for a loan that I cannot afford?

If you had done some homework (as I have) you would discover that Barclays UK web site have a Mortgage calculator http://www.barclaysmicrosites.co.uk/mortgage_calculator/ 

that uses  "The maximum you could borrow, based on 4 times your salary minus your monthly expenditure, is" as a reference- no mention of after tax income. So is Barclays UK irresponsible because they do not assess you on net(after tax) income?

The answer is clearly no. Is it because the French Government have legislation that prevents using 30% of gross income as an affordibility base..... Well no because many of the other French banks use Gross Income .

Are all these other banks being "irresponsible"? Big call Lollie. If they are then the french real estate market is about to collapse beacause of all these irresponsible banks lending irresponsibly.

 

If you want to see irresponsible lending, take a look at the US where they are now lending "interest only"  with no deposit required. Virtually a lease on the property. Oh yeah did I mention that often they do not require proof of income. THATS irresponsible lending Lollie- none of the French banks are irresponsible- just some are more responsible than others.

 

[Teamedup]

Aussie we are now with our fifth or is it sixth french bank and they have never used our gross income figure. Even our car insurance company gives loans and they take the net too. Which french banks use gross income?

 

[Will]

The big difference is that in Britain, mortgages are secured primarily on the value of your house so if you default the bank takes possession, sells it, and hopefully gets its money back. Things are different in France - people can't normaly be rendered homeless just like that, even if they owe thousands. So French banks make loans based primarily on your ability to pay back. Whether by convention or legislation (I don't know) this is based on your income less taxes, other loans, regular commitments etc. So a Barclays UK mortgage calculator is likely to be pretty much irrelevant to Barclays France.

Things might be different if you are buying a holiday home and maintaining your UK income but if you are living in France then French rules will apply.