Mortgage limit

Mindovermatter_2

Hi All,

I've spoken to a broker to find out how much I can borrow for a mortgage and was surprised to be told that the amount was lower than I wanted due to the £11k a year I put into my pension via salary sacrifice. Do I have to stop my pension payments in order to secure a larger mortgage? And then start them again once completed?

Thanks

ACG

How much is your income, how much do you want to borrow?
Do you have any other commitments or dependents?

Boozer

I had exactly the same situation, was paying an extra 6% into pension contributions and 10% on discount stock(which paid out every 6 months and always with profit), i was told to write a letter to say i would cancel these, so i wrote the letter and that is all i did.

Mindovermatter_2

I should add that my partner does get paid £900 per month, but I guess they don't take that into consideration.

Mindovermatter_2

Thanks Boozer, yes I might try to go down that route, but it seems mad to me, clearly pension payments are optional. I wouldn't make them if I couldn't afford my mortgage payments. However by not adding to pension I would be throwing away 10.7% company contribution and the 40% tax relief on my element.

leanneq

I had this problem as I pay a lot to mine. I used a broker and halifax don't include pension contributions.

ACG

How much are you looking to borrow?
When you say your partner gets £900 a month - what is this from?

Kildare

Thanks for this useful post - my companies just switched over to salary sacrifice (they ditched by final salary pension but that's another story) and the Pension Manager advised that it had no impact on mortgage affordability as I could show them my company letter to say my annual salary, P60 and payslips.

Definitely one for me to re-check!

maisie1234

Some mortgage companies just dont take certain things into account.

We have a mortgage with 7 yrs left to run (owe £220k). We wanted to remortgage. They wouldnt take my partners dividends into account and didnt believe that we havent any travelling costs. I am a home work with travel to my clients paid. They also wouldnt take into account my 25% bonus as it wasnt 'guaranteed'.

We have £800K equity in the house. I have worked for my company for nearly 30 yrs and husband 15 years. No debts bar the mortgage. They didnt like the school fees element of our outgoings. I explained that if we couldnt afford the school fees there would be debt everywhere on loans and cc and that if we really couldnt afford it we would think again. Both boys going to boarding school so VERY expensive. This company (very well known) didnt take equity into account. We have never missed a payment etc etc.

So, I told them to stuff their application process. Even the call handler recognised that something wasnt quite right and offered to pass onto 'Special Circumstances'. Couldnt be bothered and we have 2.99 with Santandar fixed for 5 yrs.

Used Which mortgage and they were fab....

Mindovermatter_2

ACG wrote: »

How much are you looking to borrow?
When you say your partner gets £900 a month - what is this from?

£330k was the amount I was after, the £900 is what she take out as wages, but her company accounts don't show any profit, apparently they only take the company profit into consideration.

Mindovermatter_2

Kildare wrote: »

Thanks for this useful post - my companies just switched over to salary sacrifice (they ditched by final salary pension but that's another story) and the Pension Manager advised that it had no impact on mortgage affordability as I could show them my company letter to say my annual salary, P60 and payslips.

Definitely one for me to re-check!

That is what I thought, although my P60 only shows taxable income, so it will exclude the pension element as it is taken before taxable income. Maybe I spoke to a poor broker.