Salary calculation for mortgage.

Anonmagee

Hi, first time poster so be gentle!

My fianc!e and I have seen a house and we would like to go down the mortgage route. I have read here for months and used many comparison sites where you simply enter a gross salary, deposit amount etc and it works out LTV and monthly costs etc etc.

Our situation is a little different from 99% of the working population.

So here goes:

We are employed together and each earn £35500 gross.
Our rent (1400pcm), council tax(1481 per year) , all bills(say about 500pcm) & sky (75pcm) are all paid for by our boss.
We also have 2 company cars, all fuel is paid for and we are allowed 10k personal mileage per year. Also paid by the boss.
Oh and 2 mobile phones also paid for by the boss and personal usage is allowed.

The online calculators generally only want to know your gross salary, but obviously this doesn't give a true reflection of our situation.

Why I'm asking: if I can increase my "income" I have a higher likely hood of being accepted for a mortgage( I'm aware of the million other criteria and stress testing they now do)

My question: are there any calculators or can someone help me work out a overall number for my/our income.

I'm looking for an single number which I can punch into a one of the many mortgage search engines/calculators

Many thanks in advance.
:money:Magee:money:

Thrugelmir

Is this arrangement contractual?

Is this additional income / benefits declared to the HMRC by either yourselves or by your employer?

shaneshaneshane

No such thing unfortunately.

As you said yourself, your in a fairly unique situation so it most certainly is one for the brokers, they will be your guiding light on this one as none of the online tools will be able to help out to my knowledge.

The lenders will most certainly be very intrested in your situation before they lend you a (what I assume) will be a large chunk of money (EG: why does the boss pay for everything etc)

Anonmagee

In our contracts it states we will receive £2100 net PCM each. All deductions are taken care of by the boss. I worked it out on listen to taxman that we earn 35500 each.

The contract also states that the house and all bills are also taken care of.

Regarding the company car, the boss owns several cars and all employees are free to use any of the cars.

It's in our contract that we have access to all vehicles for the purpose of our job, and that we may not exceed 10,000 personal miles per annum.

How would I know if the "extras" are declared ?

hcb42

lots of people have cars and phones paid for by their employers, myself included.

what the crux of this matter is what is your gross salary before deductions, which should be on your payslip, and is your car/addnl benefits being declared on your P11D? (which is how you would know it has been declared - what is your tax code? Mine is 345L for example as I have the car and health insurance benefits

Anonmagee

Payslip says:

Employers NI 312.26

£2925.73 gross salary
418.2 tax paid by employer
217.53 employee NI paid by employer
136 Student loan paid by employer
2100 net

Tax code 1000L

So judging by this I'm guessing the "extras" aren't declared?

hcb42

Well the salary stacks up at £35100 gross

No, you are not paying the correct tax.

although how the bills are £500 PCM excluding council tax is a mystery in itself.

If you have a car you call yours and you have all this benefit your tax code should drop significantly to account.

you need to determine if the benefit is worth the tax when you start paying it (and the back tax) I.e. how is your boss going to put the correct P11D value for the car if you are all chopping and changing all the time - but you clearly have these for your own use, so there is a tax implication there , as well as the lodging side of things.

going back to your original post though, I dont know how you would want to state your gross pay is higher - surely if you give up this paid for accommodation, then your net income is still your net income, and you need to ensure you can afford the mortgage - overstating a gross salary isnt going to help?

In order for others to advise you, how much is house, how much is your deposit, do you intend to live in the house or rent it out - that will give a primary indication of affordability/likelihood of acceptance of mortgage.

Anonmagee

The 500pcm is us being out of touch with reality as we haven't paid them in years.

I assumed water, gas, elec would be 100pcm each.
TV licence, phone lines, broadband, breakdown cover, contents insurances, regularly servicing of everything blah blah... Maybe 500 PCM is a bit steep I guess. No idea!?!? :-)

The property we are interested is actually next door to family. It's in very poor decorative state so our plan was to do it up and keep it for the foreseeable future.

Needs £30k spent on it to make it liveable, but I'm sure it will pass all surveys.

Property: Currently on market for £140,000
Mortgage: maybe £15,000 deposit
£125k mortgage
89% ltv
5year fixed @ 5.49% = 767 £PCM

Could put up to a 40k deposit down, but would then have an empty bank.

Barclays mortgage calculator reckons based on a £35100 salary, I could borrow £193k

My thinking was if I could increase my gross earning by including the "extras" I have an increased likely hood of getting the mortgage.

Personal: 1 credit card. £450 limit, rarely used at all.
Experien score of 940
1x ccj which is paid off 4 years ago(from my younger ignorant/reckless years)
No other debts.

Any advise welcome. Be gentle!

engineer_amy

Anonmagee wrote: »

Regarding the company car, the boss owns several cars and all employees are free to use any of the cars.

It's in our contract that we have access to all vehicles for the purpose of our job, and that we may not exceed 10,000 personal miles per annum.

How would I know if the "extras" are declared ?

If the employer is classing the cars as "pool vehicles" then it doesnt go through the tax code as a BIK, although usually for this to apply, the employee couldnt take the vehicle home everyday and do personal mileage. Im not sure how the accommodation affects the tax code, but i dont believe you should be on a standard tax code while receiving all these benefits.

You shouldnt increase your income by the amount of these benefits as when you get your own home, you lose the employer accommodation with presumably no corresponding increase in salary.

Anonmagee

Sorry just to clarify...

We will not lose the employer accommodation. We are simply looking to buy a house, do it up, and live in it a few times a week when we aren't stuck at work/ in the work house.

I'm sure there is a technicality where I must live in the property for more than 50% of the year in order to have a standard first time buyer mortgage? Hopefully someone here knows?

Or perhaps I'm missing something all together. If so please excuse my ignorance!

engineer_amy

Ok, understand now. In that case, you still shouldnt increase the stated amount of income other than what shows on your payslip/bank statement. What will probably work in your favour is the affordability calcs. As the cars, phones etc are covered by your employer and are not expenses of your own.

I cant see there being an issue between a first time buyer mortgage and part time residence, as long as you are not intending on renting the new house out. You would have to declare this to a lender. Hopefully someone more experienced will be able to confirm this?

The other thing would be your buildings and contents insurance, most insurers ask if the house will be left unattended for periods of time etc - declaring part time residence may increase premiums?