Advice re Company Car / Allowance and affect on Mortgage

twalkden

Good Afternoon,

I've recently been offered a company car or car allowance with my job and am struggling to work out which would be the better option for myself. My current car has around 80,000 miles on the clock and is a 13 reg, I have an approx 30 mile commute to work so the maintenance costs are starting to ramp up - I worked out that in the past year I've spent around £1000 on it. The main appeal for the company car is that I'll have hassle free motoring and a new, reliable car.

The thing holding me back is that my fiancee and I are looking to buy our first home towards the end of this year so the allowance would be a nice bonus to our potential borrowing. We're looking to purchase a house around £350k with at least a 10% deposit, potentially more as we have some family money coming in. Our combined salary (ignoring the allowance) is around £64,000 and the allowance would be an extra £3800 on top of that per annum.

My concern is that in the months leading up to securing a mortgage there is a chance I'll have a nasty surprise with my current car which wouldn't look great in our outgoings. Whereas with the company car potential lenders would be able to see real consistency in our outgoings. My main question really is, would a lender prefer to see that we are well in control of our money and don't have any sudden large bills from cars (i.e. taking the company car), or would the extra £3800 per annum from the allowance look better overall?

Thanks in advance,
Tim

femster82

twalkden wrote: »

Good Afternoon,

I've recently been offered a company car or car allowance with my job and am struggling to work out which would be the better option for myself. My current car has around 80,000 miles on the clock and is a 13 reg, I have an approx 30 mile commute to work so the maintenance costs are starting to ramp up - I worked out that in the past year I've spent around £1000 on it. The main appeal for the company car is that I'll have hassle free motoring and a new, reliable car.

The thing holding me back is that my fiancee and I are looking to buy our first home towards the end of this year so the allowance would be a nice bonus to our potential borrowing. We're looking to purchase a house around £350k with at least a 10% deposit, potentially more as we have some family money coming in. Our combined salary (ignoring the allowance) is around £64,000 and the allowance would be an extra £3800 on top of that per annum.

My concern is that in the months leading up to securing a mortgage there is a chance I'll have a nasty surprise with my current car which wouldn't look great in our outgoings. Whereas with the company car potential lenders would be able to see real consistency in our outgoings. My main question really is, would a lender prefer to see that we are well in control of our money and don't have any sudden large bills from cars (i.e. taking the company car), or would the extra £3800 per annum from the allowance look better overall?

Thanks in advance,
Tim

Hi Tim,

I was in this exact position when I started my process in March. My company car allowance started backdated to January and was an additional £2800 on top of my annual salary.

I am not an expert by any means, but from my experience when applying for a mortgage the less you have outgoing the smoother the process.

So my advice would be to hang in there and sort everything out let your first couple of mortgage payments go through so you know exactly what you're working with and then use your car allowance as you wish.