Part commission salary & mortgage application

rach83

Hi

Myself and my partner have come into some money. It's enough for a 10% deposit on a house. We want to ideally buy the rented property we are in which I think our landlord may be interested in selling to us for about £140k.

The difficulty lies with my partner and his salary. He brings home about £2,200 a month (net) but about £1,300 of this is commission.

I've been advised to approach Santander as they will accept all of his income as earned income. We need to borrow c.£126k is this possible on his salary alone? He has no debts and a good credit score. I'm on the tail end of maternity leave and I'm not sure I am able to return to work on the basis I want.

Thanks

The_J

Probably not possible to do it on his income alone on a rough calculation. Taking commission often depends on history with the employer, 3-6month track record and credit profile. It certainly can be used, maybe not 100% of it but it's possible.

If you intend to return to work following maternity some lenders will be willing to take your income into consideration. It sounds like things are a bit up in the air.

I would advise speaking to a competent broker who will run some figures for you. I think this could cost you about £800 a month, how does that compare to your rent? Will you be able to save up an extra 5% and get a better rate of interest?

rach83

Hi

I briefly spoke with an independent mortgage advisor and he said that Santander was our best bet.

We pay £600 in rent at the moment. If I go back to work part time I would add maybe £8k a year in salary to the mix. I have free child care for two days but aside from that child care would outstrip my wages. We probably could save the additional money at a push but it would take a while.

Cheers

Dave_Ham

Forget Santander at the moment, they will not like this case...

I genuinely believe you will be able to get this, although your income part time would help significantly.

So long as your broker is adequate, then they should be able to sort this but do not fancy chances with Santander....

rach83

Is there anyone in particular that you do fancy?

I am right on the brink of negotiating my return to work. If it means being about to get a mortgage down the line I am prepared to go for it. If we don't have a cat in hells I'd rather quit work and look after my daughter. Technically we are locked into our rental agreement till 1st December so likelihood would be that we wouldn't actually be able to do anything right this second unless we cane to an agreement with the landlord. I want to be prepared in my mind so in 6 months time we maybe able to sort something out.

Dave_Ham

Purely for information purposes, if now many lenders will want a letter from employer and you that you are returning on x hours on x salary.

If December and you are back to work, they will look at last 3 payslips..

Without knowing full facts, difficult to second guess a lender. Halifax & Nationwide are more likely than Santander and Woolwich may look at it too...!

Do not overthink this though, your broker should be doing this although not sure if there Santander selection buys them lots of credibility in these circumstances...

Crashandburn

Making sure he has 3 strong months will be one way to support the application with santander. Have a bad one and they'll base his income on this lower amount

jjhar

Hi, i am in a similar situation. I am home home looking after our kids while my husband is at work. He has been working for his current employer for 2 years now and last year earned £77000 most of which was commission. He is due to earn more this year. We need to borrow appox 350,000 to buy a house of 850000 but can't find a lender that will calculate using more than 60% of his commission - any advice? Thanks

kingstreet

That's a starting point of over 4.5x income.

Any credit commitments? If so, what are the monthly payments and how long left to run?

Financial dependents? Children? Non-working spouse?

rach83

Hi

We have now taken advice from three separate brokers. All have said that our only option is to use Abbey as they will take 100% of commission earnings into account.

The broker we saw on Saturday calculated my partners earnings based on his year to date. He said this is how Abbey would calculate it. I'm now a bit confused as we were told previously that they would mainly look at the previous three months payslips.

I'm not sure which way to turn at the moment due to the fact that in our case Abbey has a £995 application fee which is apparently non refundable and I don't want to apply for a mortgage only to get turned down and lose £995.

harvey115

rach83 wrote: »

Hi

We have now taken advice from three separate brokers. All have said that our only option is to use Abbey as they will take 100% of commission earnings into account.

The broker we saw on Saturday calculated my partners earnings based on his year to date. He said this is how Abbey would calculate it. I'm now a bit confused as we were told previously that they would mainly look at the previous three months payslips.

I'm not sure which way to turn at the moment due to the fact that in our case Abbey has a £995 application fee which is apparently non refundable and I don't want to apply for a mortgage only to get turned down and lose £995.

The possible solution to not losing your arrangement fees is to add it to the mortgage amount. So in fact you will be using the fee amount within your deposit amount as per say. This way of the application is not successful you do not lose the arrangement fees.

Just double check whether you can add this fees to the mortgage or not.

Hope this helps.