What is guaranteed bonus/commission

TBeckett100

Hi,
I will be looking to remortgage soon. The majority of my salary is bonus/comm. However when the lender asks what guaranteed bonus and commission amounts are, what do they mean by guaranteed? Surely any bonus and comm is not guaranteed if you don't perform in your job?

The bonus and comm is contractual.

ACG

Exactly.
Try putting it down as guaranteed with any lender and they:
1) Wont believe you
2) Will want blood to prove it is guaranteed.

As you say it is not guaranteed and if it was, it would just form part of your basic.

You have regular bonus/commission im guessing? Most lenders will only accept 50% of it, although there are exceptions.

dgtazzman

The section would work for me, though I doubt many people are in a similar situation when it comes to overtime. I work abroad 13 weeks and am then home for around 8 weeks on leave. At all times I get a basic salary, also when I'm home as this is basically compensation leave for working 7 days a week in the 13 weeks I'm abroad. In the weeks I'm abroad I get paid 51% fixed overtime, this is in my contract and is 100% guaranteed.

Quite a muddle for for me, as lenders won't allow me to declare it as part of my basic wages, which in theory you could argue it is, as nothing can influence it, so I declare it as guaranteed overtime, which most lenders will only take into account for 50%, meaning it's doesn't look as good for affordability.

Quite a weird system really, should just look at total earnings over the last 3 years.

BillJones

Some people do get a guaranteed bonus, for example a signing-on one, or one given when moving jobs, to match what was being left behind when moving companies.

The reason it isn't just added to the basic is that in these cases it's a one-time deal, after which it reverts to discretionary, formula driven, or whatever is normal.

amnblog

dgtazzman wrote: »

The section would work for me, though I doubt many people are in a similar situation when it comes to overtime. I work abroad 13 weeks and am then home for around 8 weeks on leave. At all times I get a basic salary, also when I'm home as this is basically compensation leave for working 7 days a week in the 13 weeks I'm abroad. In the weeks I'm abroad I get paid 51% fixed overtime, this is in my contract and is 100% guaranteed.

Quite a muddle for for me, as lenders won't allow me to declare it as part of my basic wages, which in theory you could argue it is, as nothing can influence it, so I declare it as guaranteed overtime, which most lenders will only take into account for 50%, meaning it's doesn't look as good for affordability.

Quite a weird system really, should just look at total earnings over the last 3 years.

A sensible broker can deal with this for you.

ethank

We pay 50% of targeted commission to our sales people every month and balance every quarter. The monthly 50% of commission would be classed as guarenteed.

dgtazzman

I didn't have any problems amnblog, our mortgage case wasn't borderline anyway, we had enough to spare, just demonstrating that things might not be so straightforward. Our broker just got us to produce 3 years worth of SA302's to confirm income.