Affordability Calculator Guide (as at 1st April)
The affordability calculator provides the potential loan that Abbey will lend based upon the information provided (subject to full credit score).
TYPES OF INCOME:
It is imperative that the correct details are input in order to achieve the most accurate results. The level of information that needs to be entered is as follows: Isle of Man Application (Y/N) – This allows the correct tax codes to be used when calculating net income. Basic Annual Income – for each applicant Other Guaranteed Annual Income – for each applicant. This is further split into the income types that fall into this category. Other Regular Annual Income – for each applicant. This is further split into the income types that fall into this category. Non-Taxable Annual Income. This is further split into the income types that fall into this category.
Monthly Income Deductions from Employer. There are certain deductions that come direct from an individual’s salary, such as Pension, Childcare Vouchers and Student Loan contributions. When entered here the non-taxable elements will not be taxed. The student loan contribution is calculated using the standard methodology as devised by the Student Loans Company.
Once the Types of Income screen has been completed click “Forward to Calculator”. This will take you to another input screen:
CALCULATOR:
Again, it is imperative that the correct details are input to achieve the most accurate results. The information that needs to be entered is as follows: Number of applicants, including the number of financially dependant adults Number of financially dependant children Loan Term (Years) Method of Repayment Rate for calculation* Monthly Credit commitments (exc. Credit cards) – by applicant These should only include those that are being retained after completion Minimum of 3% of Credit Card balance – by applicant Other Regular Commitments – by applicant (e.g. Maintenance, Education, Life Assurance)
The types of income filled in on screen one will automatically populate into the three income groups (highlighted above in red): Basic Annual Income Other Guaranteed Annual Income Other Regular Annual Income Have a look at the new separate Guide “How to use Introducer Internet” to ensure you enter the correct figure into introducer Internet. The Total Monthly Credit Commitments that need to be entered into Introducer Internet is the sum of the Monthly Credit commitments (exc. Credit cards) and a minimum of 3% of Credit Card balance (highlighted above in blue). A calculated net income will also be displayed on screen to provide guidance as to a suitable net income figure (highlighted above in green). *Abbey’s affordability calculation uses the higher of the Product Rate or the Affordability Rate (at 6%) to calculate monthly mortgage payments. This is a free input field and you will need to make sure that you input the correct rate.
Once all fields have been completed, click on the “Forward to Calculated Loan Amount” button to process the calculation. CALCULATED LOAN AMOUNTS:
The output screen confirms the potential loan amount that Abbey will lend based upon the information provided (subject to full credit score). This is output for low, medium and high scoring applicants. If you wish to re-calculate the loan amount, for example, using a different loan term, select “Back to Affordability Calculator” to change the details. Once you have seen the loan amounts, click on “Forward to Calculated Payment” and this will take you to another input screen:
CALCULATED PAYMENT:
This screen allows you calculate the monthly payment for any loan amount which can then be used in the AIP. Please ensure you enter the correct details are input to achieve the most accurate results. The information that needs to be entered is as follows: Loan Amount Term Rate for calculation*
Clicking on “Forward to Monthly Payment” will take you to the output screen: *Abbey’s affordability calculation uses the higher of the Product Rate or the Affordability Rate (6%) to calculate monthly mortgage payments. This is a free input field; and you will need to make sure that you input the correct rate
MONTHLY PAYMENT:
This screen will contain a monthly payment amount based on the figures entered. This amount then needs to be entered into the AIP on Introducer Internet so that affordability can be assessed in the same way it will be assessed at FMA. The screen will also indicate if the calculated payment is likely to be affordable for different scoring applicants (messages appear to indicate this).
Clicking on “Forward to Print Output” will take you to a summary page for you to print out. PLEASE NOTE: This page needs to be printed landscape to include all the information.
Form E – Apr 09