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Mortgage affordability calculations

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When applying for a mortgage, is it possible to get a lender to consider where you'll be able to reduce your outgoings? Or is it always a case of "You've been spending it for the last X months, so we're going to assume you're going to continue spending it".

Reason for asking is that our mortgage is tiny at the moment, so we have upped our pension contributions and are saving more into our ISA's. When we move, then we'd likely being taking on a big mortgage and greatly reduce our contributions to ensure that our monthly disposable income remains approximately the same.

I appreciate that the simplest solution is to just reduce our contributions now, so when they ask for X months of bank statement (is 3 or 6 months standard?), it shows we can comfortably afford it. But we might not end up moving for a year or two, so we don't want to miss out on the contributions/growth during that time.

Comments

  • amnblog
    amnblog Posts: 12,728 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Voluntary pension contributions and saving do not affect affordabiltly
    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.
  • patchyX2
    patchyX2 Posts: 129 Forumite
    Fifth Anniversary 10 Posts Name Dropper
    amnblog said:
    Voluntary pension contributions and saving do not affect affordabiltly
    Ah, that's good to know. So how is affordabiltly calculated? You provide payslips to prove income, then they review bank statements for outgoings, but exclude certain spends (e.g. Pensions, savings)?
  • booksandbikes
    booksandbikes Posts: 169 Forumite
    Third Anniversary 100 Posts Name Dropper
    I'm in a similar situation - Does it make a difference if pension contributions are via salary sacrifice? Payslips show pre- and post- salary sacrifice amounts, if that makes any difference.

  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If a lender's affordability calculator requests pension contributions, enter them. If it doesn't, don't. If pension contributions aren't requested, it's moot if they come out of gross or net income. IIRC only Santander asks for that level of detail.
    I am a mortgage broker. You 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. Please do not send PMs asking for one-to-one-advice, or representation.
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