Travel allowance

beckstas-money

Hi

A underwriter is querying my £2k travel allowance i receive from work. They want confirmation that it isn’t used for fuel - which it isn’t. It’s technically supposed to be used to cover travel in London but i get mileage for anytime i use my car. They asked me to get a letter from HR confirming this. HR are taking extra long.

This is the only this holding up my acceptance. Credit check passed, valuation accepted. All other requested docs requested and approved.

what are my options if the letter doesn’t say what the Underwriter wants to see? Look for a broker?

Our LTV is 80% if that helps. We applied directly 

K_S

beckstas-money said:

Hi

A underwriter is querying my £2k travel allowance i receive from work. They want confirmation that it isn’t used for fuel - which it isn’t. It’s technically supposed to be used to cover travel in London but i get mileage for anytime i use my car. They asked me to get a letter from HR confirming this. HR are taking extra long.

This is the only this holding up my acceptance. Credit check passed, valuation accepted. All other requested docs requested and approved.

what are my options if the letter doesn’t say what the Underwriter wants to see? Look for a broker?

Our LTV is 80% if that helps. We applied directly 

@beckstas-money Do you need the 2k to be considered for affordability for the amount you are looking to borrow?

Is it a contractual allowance mentioned in your employment contract, that could be sufficient to satisfy the requirement.

Generally speaking, if it's showing as a constant amount on every payslip and labelled as an allowance, I would expect it to be fine in the end.

You don't *need* a broker if this falls through, if you want to do it yourself you can just run it past potential lenders to make sure they will consider the allowance before putting in the application. 

beckstas-money

They said that we had already past affordability.

It is indeed in my contract. Says paid in arrears same day as salary.

To be honest I didn’t think it was included. This is the 2nd full application we have done. We pulled out of a purchase last year as the vendor asked for additional £10k. Same bank (Natwest) both on slightly higher salaries with annual increase. Lower cc balances. It wasn’t a problem last year or queried that i can remember.

Also previous property was £5k more than this one.

K_S

@beckstas-money Try plugging in your numbers here (with and without the 2k travel allowance) and see if it allows you to borrow what you need either way.
https://spa.mortgages.natwest.com/calculator/residential-affordability

If it's comfortably affordable without the 2k allowance, then it shouldn't matter whether they consider it as income or disregard it. As a similar example, if my client gets a 5k annual bonus but can meet affordability comfortably without it, I consider leaving it out from the income components (sometimes adding a note to the underwriter saying I've done so, depending on the lender) as that can reduce the documentation required and makes underwriting quicker/easier.

If you haven't already, I would send across the contract as well to the underwriter, pointing out that the 2k allowance is contractual, that should be more than sufficient evidence.

For full disclosure, I rarely see travel-allowances on my clients' payslips so don't really know what NatWest's general policy is towards it.

beckstas-money

Thank you. It’s come back as £281,475.

We need £260k with a £70k deposit.