Income considered in a mortgage application?

gabby71

Hiya

I’m currently saving to buy the house I am renting.
I’m single with no dependents (daughter is 22 and works full time).
I work full time with a salary of £25000 p/a but also get an additional £4000 in company shares I can cash each year plus a further £3600 per year in PIP as I have severe mobility problems.
Would a lender take either or both of the supplementary sources of income into account?
The house is worth around £125000 and I will have £14000 in my htb isa by the end of the year.

Thanks in advance
Gab

JayCeeEssex

Most lenders will allow PIP(DLA) as it is a guaranteed income. Share options...a slightly different cup of tea. 1) Is this a guaranteed amount each year? 2) If so how many years can you prove? 3) Is the level of share option variable? 4) Is the share option part of a 5 year share save scheme that you are encashing every 5 years?
Dependant on how the share scheme is structured it may be considered as either full or 50% again dependant on lender.

Dandytf

OP
Good luck with your Income
@JayCeeEssex . In addition to PIP is WTC also valid Mortgage income

JayCeeEssex

@Dandytf WTC or as it now is UC can be considered by some lenders (not all will entertain though!). Usually considered at 100% but you will require the latest full benefit statement to be submitted to the lender.

gabby71

JayCeeEssex the shares are given to me every 6 months by my employer, can cash them after 3 years (taxable) or after 5 years tax free so every 6 months at present with the price of the shares I am getting around £2200 before tax - can prove about 7 years worth and they have been stable at around £20 per share for at least 3 years - have steadily increased from £8 per share when I joined the company in 2009 - hope this helps?

JayCeeEssex

@gabby71 - OK, the chances are that most lenders will consider this. A lot will depend on exactly how it is presented to the lender. You say you can evidence the share distribution over a 7 year term and if you are holding for the full 5 years and then encashing tax free, some lenders may consider as 100% allowable. Are the shares a contractual part of your employment?

gabby71

I have always cashed them at the 3 year point and paid the tax, not 100% sure if they are part of the contract but they are listed as a benefit of joining the company and are allocated to every employee without any conditions attached, will ask the question to our HR Department

Dandytf

JayCeeEssex wrote: »

@Dandytf WTC or as it now is UC can be considered by some lenders (not all will entertain though!). Usually considered at 100% but you will require the latest full benefit statement to be submitted to the lender.

That could become excellent news ahead of next few years-not before 2023 approx.
My WTCtoUC auto switchover is one of the last once Amber Rudds trial becomes law.
Thanks I honestly thought council list was my only hope.
Though it would be a considerable miracle if part time wages+pip+UC +any small proceeds from sale of current flat were to make up a mortgage for a slightly more modern flat.
Interesting indeed.

JayCeeEssex

@gabby71 Many years back when working with a High Street bank we had a share scheme that was a contractual part of the job. Certainly if it is contractual at a % of your salary, then it would be considered as a guaranteed bonus by many lenders.

gabby71

JayCeeEssex thanks so much for your help ��

Dandytf

@Gabby71

Thanks for your original thread.
I since ran Natwide mortgage affordability checker and was surprised that my MS benefits could be included,
This seriously changes my future ideas, though I'de be best attempting to make a considerable attempt in reducing unsecured lending balances.
Maybe I'll make another home purchase from 2023 or soon after.
Good luck with your home decisions!