How do lenders view bonuses, commission etc.

Odette

I am looking into applying for a joint mortgage with my partner in the next six months. Within the last year we have both got new jobs. Between us, on-top of our basic pay we now receive a monthly payment from a work benefit package, monthly commission payment, and a twice yearly bonus. Nothing extraordinary, and all of it goes on saving at the moment anyway.

As for the mortgage, we have a buy-to-save account so may go with NW but we will probably visit a broker too. What lenders may look at us more favorably and what rules will they use to estimate our earnings?

Thanks for any information you have!

InsertWittyName

Do you both work for the same employer by any chance?

Only reason I ask is because that situation is quite risky - company fails and you're both made redundant!

kingstreet

Non-guaranteed variable earnings will typically only see 50% allowed by the lender. Guaranteed income, such as car allowance and shift allowance will normally be allowed at 100%.

It really depends on what is shown on every payslip at the same amount each time.

I'd say three consecutive months payslips showing the same sum each time will see 100% taken by the bigger lenders.

Odette

InsertWittyName wrote: »

Do you both work for the same employer by any chance?

Only reason I ask is because that situation is quite risky - company fails and you're both made redundant!

No we don't work for the same company.

Odette

kingstreet wrote: »

Non-guaranteed variable earnings will typically only see 50% allowed by the lender. Guaranteed income, such as car allowance and shift allowance will normally be allowed at 100%.

It really depends on what is shown on every payslip at the same amount each time.

I'd say three consecutive months payslips showing the same sum each time will see 100% taken by the bigger lenders.

Thanks Kingstreet, this is really helpful to know.