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  • FIRST POST
    • tomryan89
    • By tomryan89 11th Mar 17, 4:22 PM
    • 43Posts
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    tomryan89
    Commision & Mortgage
    • #1
    • 11th Mar 17, 4:22 PM
    Commision & Mortgage 11th Mar 17 at 4:22 PM
    Hi - wondering if anyone has guidance on commision as income? This is paid monthly so I believe it would be classed as "secondary income" but unsure of how that affects the amount we can borrow.

    My partner earns a salary of £27,500 a year. Simple.

    I earn £35,000 basic salary and £4,800 car allowance per year. I also get paid commision monthly - I've worked fo the same company for 4.5 years since joining straight university.

    May 2016 I started in a new role that pays commision on top of the salary described above, it takes a bit of time to build up to a decent amount but I'm now starting to see good commission payments. Obviously, it's still a bit up and down as that is the nature of the job.

    Last three months commision before tax: £125, £1,898, £1,996.

    We want to buy a house for £495,000 and after selling our current property we should have £140,000 deposit.

    We don't have any debt bar about £600 on a credit card. No monthly commitments like a car or loans or kids. For what it's worth, Expirian tell me I have an excellent credit score.

    Probably applying through Santander so we don't have to pay an early repayment charge.

    Please oh great strangers of the internet tell me if our dream home is within reach?
Page 1
    • tomryan89
    • By tomryan89 11th Mar 17, 4:31 PM
    • 43 Posts
    • 20 Thanks
    tomryan89
    • #2
    • 11th Mar 17, 4:31 PM
    • #2
    • 11th Mar 17, 4:31 PM
    Should probably have mentioned we are looking at a mortgage with a 35 year term
    • ACG
    • By ACG 11th Mar 17, 4:33 PM
    • 15,039 Posts
    • 7,602 Thanks
    ACG
    • #3
    • 11th Mar 17, 4:33 PM
    • #3
    • 11th Mar 17, 4:33 PM
    You may want to check their affordability calculator. I think it will be very tight even if you assume they will use £1900 x 12 as your bonus income.

    I think at this stage your priority should be checking affordability rather than narrowing down to a specific lender as I think it will be tight.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • tomryan89
    • By tomryan89 11th Mar 17, 4:44 PM
    • 43 Posts
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    tomryan89
    • #4
    • 11th Mar 17, 4:44 PM
    • #4
    • 11th Mar 17, 4:44 PM
    Oh dear I didn't think it would be that tight !

    I looked at it like this:

    - my salary: £40,400 + average of last three months commision x 12 (£16,076) = £56,476
    - partners salary: £27,500

    Combined income = £83,976

    Max mortgage = £83,976 x 4.5 = £377,892 which is more than the £355,555 we need.

    Have I misunderstood how this works ?
    • Thrugelmir
    • By Thrugelmir 11th Mar 17, 5:02 PM
    • 54,289 Posts
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    Thrugelmir
    • #5
    • 11th Mar 17, 5:02 PM
    • #5
    • 11th Mar 17, 5:02 PM
    Do you require a car to perform your job, i.e. to travel to customers?
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • tomryan89
    • By tomryan89 11th Mar 17, 5:04 PM
    • 43 Posts
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    tomryan89
    • #6
    • 11th Mar 17, 5:04 PM
    • #6
    • 11th Mar 17, 5:04 PM
    No I work from home and if I leave the house to see a customer then work pay all expenses.

    I do have a car but I bought it with cash a few year ago.
    • ACG
    • By ACG 11th Mar 17, 5:05 PM
    • 15,039 Posts
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    ACG
    • #7
    • 11th Mar 17, 5:05 PM
    • #7
    • 11th Mar 17, 5:05 PM
    No, but you are assuming they will do 4.5x income.
    4.5x income is where most lenders top out. It does not mean they will all lend 4.5x income for everyone. Some may deduct pension payments or student loan payments, some may not even lend 4.5x income.

    I have no idea whether or not Santander will lend you what you need, which is why I suggested you check. Better to know now if you are going to have to fork out for an ERC rather than leaving it until you are ready to make an application.

    https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

    On a side note, I have just checked and it appears Santander work off the lowest of the last 3 bonuses and multiply by 12. Assuming you can afford to wait until your next payslip then it may be worth holding off.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • tomryan89
    • By tomryan89 11th Mar 17, 5:20 PM
    • 43 Posts
    • 20 Thanks
    tomryan89
    • #8
    • 11th Mar 17, 5:20 PM
    • #8
    • 11th Mar 17, 5:20 PM
    Thanks for your advise by the way! I do really appreciate your time.

    So I did the calculator you linked - it's comes out saying they would lend us up to £379,000!

    I was actually reading the guidance provided with that calculator in terms of commision income evidence - it wasn't clear to me what would would be classed as primary income secondary income. Any ideas?
    • tomryan89
    • By tomryan89 11th Mar 17, 5:23 PM
    • 43 Posts
    • 20 Thanks
    tomryan89
    • #9
    • 11th Mar 17, 5:23 PM
    • #9
    • 11th Mar 17, 5:23 PM
    From the calculator : Monthly net income from all sources based on our calculation £2,523 £1,562 Total monthly net income from all sources based on our calculation £4,084
    • ACG
    • By ACG 11th Mar 17, 5:41 PM
    • 15,039 Posts
    • 7,602 Thanks
    ACG
    I do not use Santander very often so I am not 100% on their processes to be honest.

    If in doubt, speak to the lender. If I am in doubt about anything I call my account managers. Half my week is spent on the phone checking things.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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