Complex income mortgages
If you earn your income through a combination of regular overtime, bonuses and commissions, stocks and shares or pensions, then proving your total pay can be difficult when applying for a mortgage. But, complex income mortgages are possible and we can help!
Many high street mortgage lenders will not accept applications from those who do not earn a standard PAYE salary, as pay earnt through additional revenue streams is generally not guaranteed and therefore considered risky.
As expert mortgage advisers we take the time to understand all of your various earned and/or investment income sources. We know which lenders will consider your application and ensure that they receive all the necessary documentation, in order to get the best loan amount available to you.
Mortgage with commission, overtime and bonus income
If you earn a low basic salary, but receive regular overtime, commission and/or bonuses, you can use these payments to help lenders determine how much they will be willing to let you borrow.
Some lenders will allow you to use the full amount, whilst others will take 50% or an average monthly or annual amount. Each lender is different, but if you need to borrow the maximum amount, then we know which lenders to approach to ensure you can achieve this.
Proof of income required: Generally your last 3 payslips and most recent P60.
Mortgage Car, shift and living allowances
Although car, shift and living allowances form a part of a growing number of people’s salaries, many lenders believe that these are used to support living costs, rather than a cash benefit that can be put towards your mortgage repayments. Thankfully, we have access to a number of mortgage lenders who will happily include your allowances as part of your income!
Proof of income required: Generally your last 3 payslips and most recent P60.
Mortgage on benefits and maintenance payments
Benefits and child maintenance payments can be used to support your mortgage application, if you receive a regular income from a job and/or pension. These can include:
- Child Tax Credit
- Child Benefit
- Working Tax Credits
- Disability benefits including; Incapacity Benefit, Disability Living Allowance, Attendance Allowance and Employment and Support Allowance.
Many banks and building societies won’t lend to you if your income is solely from benefits. However, there are other lenders who will consider your application, which we can help you with!
Proof of income required: An assessment from the relevant authority.
If you’re self-employed and struggling to get a mortgage from your local bank, there are other well-known and respected lenders who will view the entirety of your income, and may be willing to lend to you – Great if you only take a modest tax-free personal income from your business, rather than a regularly paid salary!
Proof of income required: SA302s and 2 – 3 years’ worth of accounts.
Second job mortgage
Income from a second job will generally be considered in addition to your main source of income, if you can prove that the work is regular.
Lenders will usually want to see that you have been able to hold both jobs for 2 years, in order to show that you are able to sustain them at the same time. A second job with no prior history, will be viewed as a risk.
Proof of income required: Your W2 form and confirmation from each of the employers you have worked for, during the requested time period.
As you’re no longer earning a regular salary, many mortgage lenders will not be willing to lend to you, as you are deemed too much of a risk. However, there are some lenders who will be willing to consider your application, based on the income received through your pension/s, if you have a good credit history and a pension income large enough to cover your repayments.
Proof of income required: Original copies of your pension documents and your annual pension statement.
Mortgage with rental income
Revenue from rental properties can be used to support your application. Not all lenders will accept this source of income. But we know who will, and will therefore approach the lenders most suited to your needs, to ensure that your application is a success!
Proof of income required: Accounts for your property business and/or tenancy agreements.
Overseas income mortgage
If you are looking to get a mortgage in the UK and earn your income in a currency other than pounds sterling, there are lenders who will consider your application.
If you application is successful, your chosen mortgage lender will however convert your mortgage loan into pounds, using either their own currency exchange rate or the daily rate.
Changes in the exchange rate may increase the sterling equivalent of your debt
Proof of income required: Generally your last 3 payslips and most recent P60 or equivalent, if working outside the UK.
New job mortgages
You’ve got a new job, congratulations! Getting a mortgage with a new job is possible. But, some mortgage lenders will consider you a risk, as you may find that you are unable to afford your mortgage repayments, if you don’t pass your probation period or are made redundant. However, there are lenders who will be happy to lend to you and we can help!
Each lenders’ rules on who they are happy to lend to vary, as your age, income and credit record, are all factors that are considered, when deciding whether they will lend to you or not.
As expert mortgage advisers, we know which mortgage lenders are most likely to accept your application, so no matter how long you’ve been in your job, we are here to help you get the best possible mortgage deal at a great price!
Had a pay rise
Although a new job can make getting a mortgage difficult, a higher salary can significantly improve your chances. You will need to provide evidence of your new income, so if you haven’t already received payslips or bank statements showing your increased pay, then make sure you receive written confirmation from your employer detailing this.
If you have started a new role with lower pay, getting a mortgage is possible. But, the amount you can borrow and the type of property you can now afford to buy, is likely to be affected, which we can help you with.
Dependant on bonuses and/or commission
If you’re now on a lower basic salary, but receive regular bonuses, commission or overtime payments, then payslips or written confirmation of the additional income you could potentially earn, can help show lenders your earning power.
If you have recently decided to work for yourself, you can get a mortgage. But, as you’ll need to prove your income, you may not be able to buy a new home straight away. If you can however prove that you either have regular work, have recently left your previous job to start contracting or have regular, guaranteed work in the near future, there are still lenders who will consider you.
Getting a mortgage whilst you’re on probation in a new job can be difficult, as your employment is not guaranteed. Your chances of being accepted are therefore greater once you have completed your probation and have been in the role for six months or more. However, if you can’t wait, there are mortgage lenders who will happily accept your application.
Want a new mortgage deal
Switching your mortgage after getting a new job can be complicated, as lenders like to see a history of continuous employment. However, there are lenders who consider a range of different employment types, and will help you move to a better deal.
Getting a self-employed mortgage
If you own your own business, you are probably used to hearing how difficult it is nowadays to get a self-employed mortgage – but this simply isn’t true. The process has certainly changed, as Self-Certification mortgages which enabled self-employed individuals to borrow money without proving their income, are no longer in use. But, your chances of getting a mortgage are just as good as anyone’s and here’s how.
Most mortgage lenders deem self-employed individuals to be a higher risk than a salaried employee, and therefore require at least 2 years accounts in the form of an SA302 form (proof from the HMRC that you have reported your income) and a tax year overview – be wise and use a chartered or certified accountant to help you with this. They will ensure that your accounts are up to scratch and help you understand any details that you are not too sure about.
If you have less than 2 years’ accounts, it’s not the end of the world! There are lenders who will consider you. But, you will need to prove that you have either; have regular work, recently left full time employment and started contracting or can guarantee that you will have regular work in the near future.
Everyone loves stability
The self-employed mortgage process differs according to the set-up of your business:
- Sole trader: A mortgage lender will look at your profits when assessing your income and usually request an SA302, to see the total income received and tax due.
- Partnership: If you go into business with someone else, lenders will look at each partner’s share of the profit to determine you annual salary.
- Limited company: The lender will need to see your business and personal accounts separately, in order to assess your mortgage affordability.
As lenders love to see consistency, you should delay making any changes to the structure of your company if you are considering this. If you can’t, it’s probably worthwhile postponing your mortgage application, in order for lenders to clearly see how the changes have affected your business.
It’s usually always a good idea to retain more profit within the business. But, if you are too stringent with your income, it could affect your chances of getting a mortgage, so treat yourself! Paying yourself a higher wage for a period of time can help boost both your mortgage application and your savings – make sure you can still afford your mortgage repayments and other outgoings, if you choose to reduce your salary again though.
Save, save, save!
As with all mortgage applications, the larger your deposit, the lower your repayments will be – but, it can improve your chances of getting a mortgage even more so when you’re self-employed.
Let your partner take the lead
If your partner is a salaried employee, then adding them as the first name on your mortgage application, could also help your chances of getting it approved. They may not earn as much as you, but lenders will favour them, as their income is looked at as being more regular and predictable.
Seek expert advice
Our mortgage advisors are experts in self-employed mortgages and can help advise you on how much you can afford to borrow, and source the best lenders to suit your individual needs, in order to maximise your chances of being approved first time. If you decide that a mortgage is the right choice for you, they will also complete all the relevant paperwork, and liaise with your lender, estate agent and solicitors to ensure that your application is a success!