Mortgage Application & Season Ticket Loan

Giraffe01

My boyfriend and I both have interest-free season ticket loans (with about 10 months left to run on them) and we pay £221 each which comes out of our monthly wage and is detailed on our payslips. If we declare these loans to a lender as a ‘credit commitment’ it might look like we have horrendously massive loans when in actual fact they are just our standard travel costs. Neither of us have formal credit agreements with our employers, they just wrote us cheques to cover the cost of an annual season ticket and divided the payments by 12 to come out of our pay.

We do have the option of getting our season tickets refunded and paying back our employers the remaining balance early but that would mean we would have to pay out for more expensive monthly travelcards until our mortgage application had gone through which seems a bit ridiculous. Obviously, I know that either way our travel costs will have to be declared to determine affordability but I imagine that declaring a loan on an application carries a bit more severity than standard travel costs…
I just wondered if anyone had experience of this and if lenders treat have treated these loans differently to other loans as they are quite a common employee benefit?

jockosjungle

I doubt it'll be a loan that'd show up on a credit search to be honest, just an arrangement that most companies do. When I applied for a mortgage in principle, they wanted to know my take home pay more than gross and didn't seem much to care about student loans, etc. Just be up front an honest about the payments, maybe avoid referring to it as a loan but that your company buys your season ticket and you pay for it monthly.

R

Giraffe01

Thank you! Put my mind at rest a little. That sounds like the best plan of action.

jockosjungle

Should add that the HSBC specificaly asked me about travel expenses, so you can bring it up then.

R