Mortgages for commission based workers?

Sarah-V

Does anyone have any experience of getting a joint mortgage where one or both of you work on commission?

Due to family circumstances, my OH and I have £130,000 for a deposit/fees/stamp duty.

I earn £25,000 a year, but he has a guaranteed basic pay plus car allowance of £29,100 and also has commission based pay.

Last year he earned just over £50,000 of commission before tax (so about £30,000 after)

That isn't a guaranteed income, so I don't know how to work things out on online calculators.

We think we can probably afford to look at monthly mortgage repayments of around £1,300 or £1,400 at the moment, but what I don't understand is how much that means we are likely to be able to borrow.

We don't want to waste any vendors time by going to look at houses that we may not be able to get a mortgage for.

Is half his previous annual commission a fair amount to include?

ACG

How many years has he been doing the job?

Would his P60s back up that he has been able to earn that sort of commission for a couple of years?

I have a case going through at the minute where someone earns a wage but their take home pay is pretty much double if not more due to commission. We have 3-4 P60s to evidence it and the lender is happy enough to accept it.

I think you need a broker really or speak to the lender BEFORE you do credit checks to see what they would want as evidence.

But to answer your question, theoretically it is possible yes.

Sarah-V

Thank you very much.

He's 25 and has been at the company for 4 and a half years, but he started off in the telesales team and was only promoted to this role about 18 months ago. He didn't really make much in the first 6 months as he was learning on the job, so this last year is really the first one he's been earning the high levels of commission and he would only have 1 year of payslips to back this up.

He's keen just to borrow through one of our banks/BSs (Halifax, Nationwide, Natwest, Yorkshire & Furness) but I feel like we're probably missing a trick if we restrict ourselves.

ACG

Why do you have 5 accounts?

Restricting yourselves wont help. Sticking with the bank where his wages go may be beneficial but to be honest you need to speak to the lender before submitting anything, if they want 3 years worth of P60s then you cant give them that as it wont evidence what they want. Speak to a broker or do the legwork to see whether there is a chance of it going through.

Sarah-V

We each have a person account, a savings account and we have a joint account.

We need to have a tidy up but assumed that as we would want a mortgage at some point, some history might help! I realise it looks a bit silly.

Thanks for your help. I think we'll have to speak to his bank and then potentially a broker.

Funny_old_game

Rule if thumb assuming lenders take commission, many only usr 50-60% of income that is nit basic income. This will also include car allowance.

Funny_old_game

Random addition I didn't want to be on 13 posts.

kingstreet

If the payslips show the basic and car allowance are the same, they will both be allowable as basic and 100% taken.

In addition, you should be able to get the last six months' average commission included, or at worst the lowest amount of commission on one of his payslips in the last six months, annualised with about 60% of that taken into account.

There are various permutations depending on chosen lender. A whole market broker would be the best route for this, rather than the lottery of hoping one of these five account providers will just happens to be the correct choice...

Wh05apk

How much are you looking for ?


Given your basic incomes you would typically be looking at a mortgage of about £250,000, possibly another £50,000 with commission taken into account.

Sarah-V

We are probably want around 220,000, so that's sounding positive!

We have a couple of appointments next weekend to chat to a broker and a bank. Thanks for everyone's help.