Mortgage advice needed

[Edd]

Anyone on here a mortgage advisor? Or know there stuff on it?

Need advice and don't want to ask Nationwide as you'll understand bellow

I'm on £30k
I've been given new terms and conditions
My wage slip will now say I earn £24k with a personal allowance of £6k

We would like to get more on the mortgage to do a extension

Will lenders include the personal allowance?
Or just my basic of £24k?

Any advice or imput would be great
Obviously I don't want to ask current lender bout this

Edd

[Kev Turbo]

Edd,
i am no Finacial adviser but from my experience they will include any allowances / bonus as a basis for funding.

[joff-turbo-nova]

Edd,
i am no Finacial adviser but from my experience they will include any allowances / bonus as a basis for funding.

Kev & Edd,

I'm a director of an IFA firm and dabble in mortgages occasionally. Things have become a whole more complicated since April 2014 since the new MMR came in (Mortgage Market Review) . The responsibility for proving that the mortgage is affordable now sits with the lender, and as usual with the big companies they have decided to cover their ar$es and go to the extreme !

This means that when proving income , they will only include guaranteed income that can be documented . Firstly how is the personal allowance paid (is it still listed on the payslip) Secondly have you got documentary evidence from your employer as to why they have made the change . Thirdly is your employer contractually obliged to make the "personal allowance" payment.

If it's in your T&C's then it should make no difference from a what's included point of view, however they still may say no , due to the enhanced affordability checks that they will now make.

Best thing will be to approach your existing lender, be up front about the changes, and see what they say about borrowing some extra.

At work we are now concentrating on investments & pensions however I have an excellent mortgage contact who is very good at finding a lending with the right "flexibility" that you may be looking for , should you need to find an alternative lender.

PM me and I will pass on the details.

Cheers

Joff

[Jack]

Firstly how is the personal allowance paid (is it still listed on the payslip) Secondly have you got documentary evidence from your employer as to why they have made the change . Thirdly is your employer contractually obliged to make the "personal allowance" payment.

If it's in your T&C's then it should make no difference from a what's included point of view, however they still may say no , due to the enhanced affordability checks that they will now make.

That bit interests me. My basic salary is about £27k, but I get a £3,000 RRA and £3,000 relocation allowance on top of that (i.e. +£6k). Then there's any overtime or bonus payments which would be in addition to all that.

The first bit, RRA, is a continual retention allowance that's contractually protected as I took it across to Boeing as part of TUPE conditions when we got outsourced from MOD. The second part is an allowance thats paid for 7 years (ending June 2019) as remuneration for having to move house with the job. Both are listed on my pay slip, taxable but not pensionable.

In terms of a mortgage, I'd figured they would take the RRA into consideration as its a protected continual payment, but not the relocation allowance? And certainly not any bonuses or overtime?

[joff-turbo-nova]

In terms of a mortgage, I'd figured they would take the RRA into consideration as its a protected continual payment, but not the relocation allowance? And certainly not any bonuses or overtime?

Jack, spot on - if its part of your package its included - if its short term (read less than your mortgage term) it won't be included.

Joff

[Andy]

So if they see that as short term,are tax credits taken into consideration?
As they could be ditched at any time?
My bank takes them as your earnings

[joff-turbo-nova]

So if they see that as short term,are tax credits taken into consideration?
As they could be ditched at any time?
My bank takes them as your earnings

Depends on both the lenders policy and the age of your kids - unlikely if they are 16+ , possibly if they are two or three years old. However if you are applying for a 25/30 year mortgage you cannot guarantee that you will receive these benefits for that period of time, the lenders may still decline to take them into consideration - especially with the Government policy of reducing state assistance for families and the disabled.

Joff

[Andy]

But you could go round in circles for days
Tax credits abolished,get laid off etc
All in all its crackers when the same rule applies as not paying rent...dont pay youre out.
but yet mortgage repayments are so much lower than the rent you have been paying on the same property for 7plus years....

[Andy]

Also you say "the governent policy"
They might not be in next year never mind the duration of the borrow!!!