Overtime, bonus, commission, and employment allowances, such as car allowances, can have an impact on how much you can borrow.
Overtime, bonus, and commission income: If you receive regular overtime, bonus, or commission income, lenders may take this into account when determining your mortgage affordability. However, lenders will typically only consider this income if it has been received regularly and recently eg a monthly commission would need to be seen on payslips for at least the last 3 months, or an annual bonus for at least 2 years.
Employment allowances: Some employment allowances, such as car allowances, are considered as part of your income and can be used to help increase your borrowing capacity. However, you may need to provide evidence of the allowance, such as a letter from your employer, to verify that you will continue to receive it.
It’s worth noting that different lenders may have different policies and criteria when it comes to assessing overtime, bonus, commission, and employment allowances income, and this is where a good mortgage broker can assist in using the most suitable lender for your circumstances
It’s also worth noting that even if a lender is willing to consider these types of income, they may still apply a lower percentage of it to the overall income – e.g. only 60% of the 3-month average commission will be used by the mortgage lender
In conclusion, overtime, bonus, commission and employment allowances such as car allowances can be taken into consideration by the lender when assessing how much you can borrow, but it depends on the lender’s policies and the stability of this income as to whether it will be accepted
At The Mortgage Branch, we are here to help you secure the most suitable mortgage for you, whatever your situation.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
