Mortgage Providers : 12m proof of earnings required

planteria

is it standard for a mortgage lender to require 12 months proof of earnings from a buyer?
are some lenders flexible in terms of taking other assets into account, or is it the case that lenders want to see affordability via consistent income from employment?

Thrugelmir

Questions rarely get asked for no good reason. Something has triggered the request. 

K_S

planteria said:

is it standard for a mortgage lender to require 12 months proof of earnings from a buyer?
are some lenders flexible in terms of taking other assets into account, or is it the case that lenders want to see affordability via consistent income from employment?

@planteria It isn't standard but depends on what kind of income is being considered for the mortgage. For example if it's standard PAYE basic only income, the lender is usually happy with 1-3 recent payslips. If it's a zero-hours contract, they usually want to see the last 12 months payslips. If there's an annual bonus involved, they may want to see the last 2 P60s, etc.

For standard residential lenders, affordability calculations are always based on income and to a lesser extent on LTV, other assets (ISAs, other properties, investments, etc) don't play a part in it.

planteria

Thrugelmir said:

Questions rarely get asked for no good reason. Something has triggered the request. 

not in this case. a conversation with a building society started out with a clear policy that 12 months of payslips are always required. this potential borrower can easily buy the property outright, but doesn't want to. the challenge is that he's currently not working. 

planteria

K_S said: For standard residential lenders, affordability calculations are always based on income and to a lesser extent on LTV, other assets (ISAs, other properties, investments, etc) don't play a part in it.

with you K_S. their focus on affordability makes sense, of course, as mortgage lenders really don't want to repossess properties. the chap concerned is looking at things from a 'their !!!!!! is well covered by my assets if there's a problem' perspective.

K_S said: ...if it's standard PAYE basic only income, the lender is usually happy with 1-3 recent payslips. If it's a zero-hours contract, they usually want to see the last 12 months payslips.

i will suggest getting into this position, which shouldn't be too difficult.
 

parkingadvice1212

planteria said:

Thrugelmir said:

Questions rarely get asked for no good reason. Something has triggered the request. 

not in this case. a conversation with a building society started out with a clear policy that 12 months of payslips are always required. this potential borrower can easily buy the property outright, but doesn't want to. the challenge is that he's currently not working. 

How do you expect to get a mortgage without a job??

MWT

planteria said:

K_S said: ...if it's standard PAYE basic only income, the lender is usually happy with 1-3 recent payslips. If it's a zero-hours contract, they usually want to see the last 12 months payslips.

i will suggest getting into this position, which shouldn't be too difficult.

Do note though that it can't be by getting a salary on PAYE with a company that they substantially own, as they will just be treated as self-employed...

planteria

good point MWT, will mention that.

planteria

we've spoken to a broker today and as long as a recent job applicaiton is successful should be fine.
thank you for help above.