How are mortgages calculated?

Technaut

I have a permanent contract with a company and the salary is £17.5K per year, with the same company I have an upgraded temporary post and the salary on that post is £25k. The temporary post has no end date.

What would the mortgage company calculate the money available to me? Would it be on the 17.5 or the 20k and also what kind of calculation do they do, is it still 3 times salary?

Any info is appreciated

Thrugelmir

Technaut wrote: »

I have a permanent contract with a company and the salary is £17.5K per year, with the same company I have an upgraded temporary post and the salary on that post is £25k. The temporary post has no end date.

What would the mortgage company calculate the money available to me? Would it be on the 17.5 or the 20k and also what kind of calculation do they do, is it still 3 times salary?

Any info is appreciated

How do you get a permanent temporary upgraded post?

There must must be something in your contract which allows the Company to revert you back onto your original contract. As the position is only temporary.

They would take your permanent salary for mortgage purposes.

Technaut

oh yeah if the temp contract ever ends (its a project so will end one day) then i revert back to my permanent contract.

Is there no way to convince them to take the temp contract figure into account? Or are they all particularly strict about this.

Do they still work it 3 x salary?

gemma7wayne

They may take your permanant earnings and take the extra amount as overtime which is normally 50% of earnings. or they may use last 6 months pay slips averaged over the year. your best to speak with them as they all work differently.

Debt_Free_Chick

I think this largely depends on what you disclose on the application form. Remember, you should complete the form honestly.

I can't see that you could do anything other than to disclose that you have a permanent position on a salary of £17.5k but that you are temporarily in a post paying £20k. You couldn't, for example, give the impression that you have a permanent post paying £20k - you would need to give the lender the full picture.

It will then be down to them how they treat this situation but given that lending is still stringent, I can't see many that will base their lending on £20k salary. You should budget on £17.5k, but see what the lender says. Or perhaps discuss with a broker as they tend to know what lenders will and won't accept.