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Mortgage, gross or net pay?
m_howell
Posts: 10 Forumite
My recent house sale has fallen through, because of this I am going to have to re apply for my mortgage. Since my original application I have been given a company car so my net pay has decreased because of tax.
Will my net pay decreasing have an impact on the mortgage decision or is it based on gross pay?
Will my net pay decreasing have an impact on the mortgage decision or is it based on gross pay?
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Comments
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Yes.
Extra outgoing will result in a lower mortgage funds being provided to you.0 -
thanks, does it count as an extra outgoing as it just means i pay more tax on my wages.
From looking online I have seen people say the bank will look at gross not net income?0 -
Depends on lender. Speak to a broker and let them find an appropriate lender for you.I am a Mortgage Broker.
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice0 -
I believe so.
Extra tax on PAYE = reduction in income PCM/ net.0 -
I don't believe looking at gross. Essentially it's money that you haven't received so the bank couldn't give this as it's non existent as it's prior to deductions.0
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Typically, you enter gross annual income in affordability calculators, not net monthly.
Many lenders will take no notice of your net pay. However, those that will are to be avoided if you are close to maximum affordability.
This is where a broker will prove their worth.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Your lender will normally look at gross income. I have never heard of a mortgage lender who looks at tax coding. You could argue that even though you are taxed more you save on running a company car by not having to buy or run a private one. We never had an issue and my husband had company cars with all our mortgage applications.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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enthusiasticsaver wrote: »Your lender will normally look at gross income. I have never heard of a mortgage lender who looks at tax coding.
You may not have done, but many lenders factor in net income so, in those applications, tax coding does have an impact.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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