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Mortgage - what counts as income
Catmaspudding
Posts: 63 Forumite
I am applying for a mortgage (I have a DIP) but want to make sure I can get the best possible rates.
I put down my yearly income as about £28k, however I also do a lot of OT + a 3k yearly bonus. I worked out my actual income is about £47k.
It is highly unlikely I would lose the extra pay - and if I did I would be moving jobs ASAP. Personally I am aware that my wage will be increasing over the next year, however I have a short time frame to buy the house I want (at an excellent price from a family member).
It would be a shame if I couldn't count a lot of this when I do the real application. If I use 28k then I would be taking out the maximum possible mortgage which doesn't sound great - I feel it would affect the interest rates I am offered? I can obviously afford a lot more per-month than the 28k would suggest.
I was planning on going with my bank (HSBC) anyway as they have a better idea of my finances and the rates look competitive. Is there a good reason to go elsewhere?
I put down my yearly income as about £28k, however I also do a lot of OT + a 3k yearly bonus. I worked out my actual income is about £47k.
It is highly unlikely I would lose the extra pay - and if I did I would be moving jobs ASAP. Personally I am aware that my wage will be increasing over the next year, however I have a short time frame to buy the house I want (at an excellent price from a family member).
It would be a shame if I couldn't count a lot of this when I do the real application. If I use 28k then I would be taking out the maximum possible mortgage which doesn't sound great - I feel it would affect the interest rates I am offered? I can obviously afford a lot more per-month than the 28k would suggest.
I was planning on going with my bank (HSBC) anyway as they have a better idea of my finances and the rates look competitive. Is there a good reason to go elsewhere?
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Comments
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How much do you want?
Some lenders will use 100% of overtime and bonuses under certain conditions - ie they can see it on the last 3 payslips, they can see it on a P60 and so on, it varies from lender to lender.
Some will accept the full bonus, others will only accept a percentage if it is paid annually (rather than monthly).
If you need more than your basic, you need to check with the lender what they need to evidence it, how much of it they can use and then you can do the affordability calculators and go from there.I am a Mortgage AdviserYou 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.0 -
My DIP only used my base wage for a £150k mortgage (the maximum), but I am worried I will be offered worse interest rates or even declined when I do the real application.0
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You wont be offered a worse rate because you want to borrow the maximum possible based on your income.I am a Mortgage AdviserYou 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.0
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Brilliant, thank you
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I was planning on going with my bank (HSBC) anyway as they have a better idea of my finances and the rates look competitive. Is there a good reason to go elsewhere?
If you need a generous affordability calculation, yes.
40% of your income is variable and you may need a Lender that will consider 100% of it.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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