Salary V Affordability

spidereyes

Im just wondering if anyone can advise if mortgage lenders look at just the face value of the salary amount rather than the monthly outgoings also?

At present Im working in a lowish paid job but am due a small pay rise shortly. At present I work close to home and I walk to work, therefore my outgoings are nil in this respect.
However, Ive potentially been offered a job further away which is paying considerably more (about 5k) but then I will incur fairly hefty travel expenses (about 2.5k)

It will average out that my take home pay after payrise would be the same as my take home pay in the new job after travel expenses, but on the face of it using online mortgage calculators the new salary would increase my borrowing amount by about 11K .

Looking at getting a mortgage next year so this is potentially really going to affect my job decision.

Thanks

witchy1066

in our case they looked at affordability , taking everything into consideration, even down to how much we spend on holidays and clothes over the year , literally everything, I don't know if all lenders go into so much information but some of the questions I found quite bazaar,
at the end of the day I suppose its better to know how much you can realistically afford and still have a life

amnblog

Lenders have a view on how much it costs each single person, couple, or family to live, and how much each child costs to run.

This is the basis of how they work our affordability.

One key difference in affordability is existing debt or lack of it, and this is factored in.

Quite rightly they will not concern themselves with whether you shop at Lidl or Waitrose, eat fillet steak and wear Stuart Weiztman shoes, or eat tofu and wear sandals.

kingstreet

They also lend less where the income is lower. This is because at lower incomes, more of the income is used for subsistence expenses, so a £15k salary on Halifax affordability generates a maximum loan of £62,940, £20k is £97,125 while a £30k salary means £150,000, five times gross annual.

witchy1066

kingstreet is spot on with lending limits , we found many lenders would not go over 3.5 times income (quite right in my opinion) which is something we would not have thought about had we not had a MB

OP I think most lenders take travel costs into consideration when working out affordability

Paully232000

wrt travel costs our mortgage company, through a broker asked us how many miles and how long it takes us to get to work each day.
Not sure why but presumably so they could make an educated guess as to how much we spend each month on travel.

amnblog

Paully232000 wrote: »

wrt travel costs our mortgage company, through a broker asked us how many miles and how long it takes us to get to work each day.
Not sure why but presumably so they could make an educated guess as to how much we spend each month on travel.

Might have been to evidence to the lender that the trip was commutable and you were not getting a residential mortgage for a property you would not be living in.

Paully232000

amnblog wrote: »

Might have been to evidence to the lender that the trip was commutable and you were not getting a residential mortgage for a property you would not be living in.

never would have thought of that as being a reason, thanks for the info.

Just seemed at the time an odd question as it was well after we had provided bank statements, payslips, contracts of employment etc

amnblog

If work is an hour or so from home this can come up.