1st Mortgage: Annual Bonus

buythedip

Hi guys, my wife and I will apply for our first mortgage next March. I am curious as to how lenders will assess the elements of our income based on performance.

My bonus structure is as follows:
- Fixed 25% of base
- Variable, from 0% to 200% of base
- 30% of any variable bonus is retained until the following year

Does anybody have any experience with this type of variable income? I know that some people at work have an interest only mortgage and scale their repayments according to bonuses.

middleclassbutpoor

Do you have a history of this bonus arrangement being paid?

buythedip

Hi, yes, across that full range over 3 years.

middleclassbutpoor

You will need to speak to a broker

Typically you will find lenders who will look at non guaranteed bonuses and the amount they will look at is likely to be a % of the bonus or an average of previous bonuses.

This type of pay is usually associated in my line of work with directors/board members/senior executive pay so it's not uncommon but as I say you should seek the services of a broker who will understand which lender will work best for your situation.

buythedip

Thanks a lot for your help. I work on a trading desk.

How do you go about finding a broker? Sorry for the basic questions!

middleclassbutpoor

Personal recommendations are usually the best.

LRmortgage

Ask your colleagues or friends If they can recommend a Broker to you.

If their pay is structured in a similar way they may we’ll have previously used a broker.

Failing that, google “local independent mortgage broker” and you’ll likely come across a few.

Brokers on this site are not allowed to tout for business.