Overtime

jimmy*c

Not sure where to put this...

Since overtime is income, would it count on a loan application? It's just, my salary is pitiful but the overtime I regularly do brings it into the region of £30,000pa on average...

Just a thought?

PeacefulWaters

It depends how the income question is worded on the application form.

But relying on overtime to support credit commitments is asking for trouble.

jimmy*c

I base all my budgeting on my basic salary so that I never end up short. Most applications I've seen ask for salary, but with overtime I almost double it, and that overtime is an average. Any other input?

chesky

Try talking to a broker and show him your wage slips for the past year. They will be able to advise you - maybe such a mortgage would cost more.

Voltaire7

jimmy*c wrote: »

I base all my budgeting on my basic salary so that I never end up short

So you base all your budgeting on basic, this loan is part of your budget, ergo, you put down basic.

I don't know why you had to ask.

jimmy*c

I ask because, I'm assuming, the chance of getting a decent rate will increase the higher the salary. At the moment I need to put just over £17,000 as my salary, but on the regular it is much much higher, so if i were to put in the salary+overtime, I'd be set for better rates.

The loan is indeed put into my budget so there would be no problems paying it back, it's just the having to declare pretty much half my actual monthly/yearly earnings as an average.

YorkshireBoy

jimmy*c wrote: »

I ask because, I'm assuming, the chance of getting a decent rate will increase the higher the salary.

Income (and existing commitments) will influence loan amount granted. Credit repayment history will influence APR.

You're assuming they'll assume there's a reduced risk of you defaulting if your income is higher. That's not the case because they'll limit their exposure by limiting the loan amount they'll grant.

But if you claim to base your budget on basic earnings, where is the additional £13K per annum (gross) being spent? If you'd saved it you wouldn't need a loan, and if you haven't been getting the overtime for long then you can see why they don't usually allow overtime (or bonuses) to be taken into consideration.

jimmy*c

My repayment history is spotless - I have always paid on time, every time, to the full amount required of me at the time.

I understand that different lenders look at me in different ways, so income isn't really the be all and end all, I just thought it may influence a decision/offer.

I am currently overpaying my 2 loans but I'm doing a lot of saving for a deposit for a mortgage, so that is where the rest of the money is going, as well as a treat or two, not to lie. I don't 'need' a loan (you might have seen my previous thread about being offered 22.9% at best), I just thought if I got a loan at a lower rate, I could bunch the two together at a lower rate and make the same, if not more, overpayments that I already am.

The overtime I'm getting seems to be a given, a nature of the job if you like, and it's been steady for the past 5 months. It does go up and down, but like I say, as an average it makes up nearly double my salary.

There just seems to be a fine line, ignoring terms and conditions of each lender, between salary and "income", as in my case.

andyfromotley

Of course they have no idea of your income as its not recorded by CRA's. However you need to decide on a figure and use that for applications. Varying the amount on applications can be picked up by fraud software apparently?

PeacefulWaters

Are you saving for a mortgage deposit?

Then what are you needing to borrow for?

This feels contradictory.

A mortgage lender is going to restrict the amount they'll lend for house purchase when they look at a mix of overtime and unsecured credit.

I'd be avoiding new credit if I was saving for a house.

YorkshireBoy

andyfromotley wrote: »

Of course they have no idea of your income as its not recorded by CRA's. However you need to decide on a figure and use that for applications. Varying the amount on applications can be picked up by fraud software apparently?

Whenever you apply for credit, the details you supply are shared with fraud prevention agencies (FPAs). This will include employer, job title, and salary.

OP seems to have had a lot of credit in the past (payments always made on time). Indeed, they currently have two loans (and the purpose of the new loan appears to be consolidation).

So at the moment, their FPA data for their last two applications might read as:

Employer: Widgets Ltd
Job Title: Toolmaker
Length of service: 3 years, 4 months
Salary: £17K

Now if their next application data is recorded as:

Employer: Widgets Ltd
Job Title: Toolmaker
Length of service: 3 years, 10 months
Salary: £30K

So, same details but a near doubling of salary over a 6 month period. That's bound to raise a flag of some sort, and hopefully not a CIFAS flag!