Will the way partner is paid effect amount we can borrow?

Worried

OH and I are going to buy start looking for a house in the next few months and will be seekign mortgage advice soon, but I was just wondering if anyone could help with the following...

OH was promoted to Assistant Manager at his firm nearly 2 years ago. He got a substantial pay rise, but although he has signed the contract, his company have not moved him on to the proper salary for this position yet and have been paying him by giving him his old basic and making up the rest as an overtime payment. They keep promising him they are going to sort it out, but it's just dragging on and on.

Anyway, do you think him being paid in this way will effect the amount we can borrow? For simplicity sake, say somebodies pay slips reflect that they are paid £15,000 p.a. basic and £15,000 P.a. in overtime, would they be able to borrow as much as they would if they were paid £30k basic? If not, would it be significantly less? I understand that lenders take into account guaranteed overtime? What qualifies as guaranteed overtime and how does this work?

UK007BullDog

Your partner needs to sort that out asap as some lenders want up to 3 months pay slips.

Some lenders will take a percentage 50% of the overtime and others 100% depending if he can prove it is "guaranteed" byshowing up on his last P60.

But to make things easy for you it is best if he can get it sorted as a basic wage, that gives you access to the highest borrowing power available to you.

herbiesjp

If the contract says basic salary is "x" amount then his payslip should say basic salary is "x" amount.

He needs to get it sorted asap.

With some lenders it may not make a difference, but with others it definitely will.

Their lack of respect for your OH's contract could be affecting you in the pocket, by potentially making some mortgage schemes not available to you.

HTH

MortgageMamma

There are some lenders who will accept 100% overtime so long as it can be documented on a number of consecutive payslips or on the P60. Some lenders will take an employers reference in conjuction with payslips also. Do you knwo what his employers reasoning is behind leaving him in this situation?

MM