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Mortgage affordability calculations
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patchyX2
Posts: 129 Forumite

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.
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.
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Comments
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Voluntary pension contributions and saving do not affect affordabiltlyI 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.1 -
amnblog said:Voluntary pension contributions and saving do not affect affordabiltly
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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.
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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.1
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