Regular overtime

cmbrookes

Hi all

wondered if any brokers could tell me how in my situation, would regular overtime be calculated. So my payslips are a nightmare to read with the breakdowns of hours and rates worked. I am paid four weekly and my basic annual salary is listed as headlined basic annual salary. So I’ll use 30k as an example. So I’ve divided 30,000 by 13 because of 4 weekly pay which is £2307 so my basic gross pay every 4 weeks is £2307. Would I be correct in saying that anything after that is classed as extra income and can be classed as over time? 

Then an average of overtime is taken from last 3 payslips is taken and multiplied by 13 to give an average annual overtime amount? 

K_S

@cmbrookes Generally speaking, you can't assume that anything over and above basic will be considered as income for the purpose of the mortgage. It will depend on the lender, on what the lines say on the payslip and (to a lesser extent) subjectivity at the underwriter's end. 

With regard to the mechanics of annualising and adjusting it, it will differ from lender to lender. One might take the lowest of the three and annualise it at 100%, another might take the average of the 3 and annualise it at 60%, another will take 6 months worth and annualise it at 100%, some will treat it in two different ways depending on whether the latest P60 supports the annualised figure.

cmbrookes

If I posted my wage slip on here with out the personal details and only the break down of my pay, would anyone be able to explain how a mortgage advisor would work out my overtime and what they would class as overtime.  It's a Network Rail wage slip and it's a bit of a nightmare to understand.  This is so I can input the correct overtime into the intermediaries when doing affordability for myself.

Aceshigh84

I used L & C a few years ago to get a NatWest mortgage, I was able to justify regular overtime to bolster my normal salary but I had to show evidence via 3, then 6, then 9 months worth of payslips before they accepted it.

As for working out the figures, personally I'd take your average overtime earned across the year and add that to your salary to get a total figure. That's the figure the mortgage company will use to make their assessment on whether you make enough to afford them mortgage or not. And be ready to justify it with payslips.