Wage bonus factor on mortgage

andrewd28

Morning

I am saving for my first house and looking to buy next year.

I am saving my own money as well as putting into a help to buy ISA I opened last year.

I am trying to work out how much I could lend from a mortgage company.
However, it's difficult as my wage consists of a lot of bonus pay.
Last year on my P60 I managed to earn around 70% of my basic wage amount on top of my wage.

I just would like to know how the banks/building societies factor this when considering how much they'd lend me. I've been told Halifax only look at 60% of the bonus amount. Is this the same with them all? I've looked around on internet and can't seem to find anything.

Many thanks

Fiesto88

Every lender has a different approach, but most use a certain percentage to mitigate the risks linked to the income not being guaranteed.

Fiesto88

Meant to add, the easiest way to get an idea of how much you could borrow is use the websites lenders have for intermediaries rather than the general public. These will have rough affordability calculators.

This gives a general idea only. A Broker would be needed to ensure any application took into account all circumstances.

andrewd28

Also, my mrs has got bad credit, obviously it'd be a mortgage in both our names. Would that affect it or could they just go off my credit rating

marliepanda

andrewd28 wrote: »

Also, my mrs has got bad credit, obviously it'd be a mortgage in both our names. Would that affect it or could they just go off my credit rating

The application as a whole will be looked at.

amnblog

Your two particular factors, high percentage of variable pay, and patchy credit history could make your options very narrow.

A case for a mortgage broker.

If you have a track record of a number of years on the high bonus you may get it included in affordability in its enterity. To give yourself a guide multiply your two total incomes by four and you should be in the ball park.

Fiesto88

andrewd28 wrote: »

Also, my mrs has got bad credit, obviously it'd be a mortgage in both our names. Would that affect it or could they just go off my credit rating

I’m an underwriter so by default it means I can only speak for how the lender I work for views things. Bad credit isn’t necessarily a show stopper but it’d depend on a number of things:
- the extent of the ‘bad credit’
- how recently it was
- whether any sort of formal management plan was in place
- what the circumstances behind it were.

Get a broker and give them as much information as possible about it, being completely honest and upfront. They should then know which lenders may consider you.