Mortgage application - which lender includes most commission in earnings?

J

Jay jr

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I'm a frequent visitor AAM but rarely post I & was hoping for some advice.

I'm currently planning to sell and trade up and will be a 2nd time buyer.

As a sales manager, over the past 3 years I have earned between 35-40k per annum as commission on top of my base salary.

Current application by BOI have only allowed for 9k of this to be included in how much we can get approved for.

Im just wondering if anybody has had experience in getting more of your commission included in your mortgage approval and whats the best way to go about this?

Thanks,
 
Each bank is different. I think UB will factor in 50%, but it will depend on what industry you're working in, and how regularly / consistent the commission payments are.
 
RedOnion said:
Each bank is different. I think UB will factor in 50%, but it will depend on what industry you're working in, and how regularly / consistent the commission payments are.
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Thanks for this RedOnion, I'll look into UB.

cmalone said:
What is your basic - is it over 50k?
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Yes, base salary over 50k.

I had heard some benefits of using a broker rather than the bank directly is that you're more likely to have more of your commission included in your approval, not sure how true this is. Anybody have some experience with using broker and the inclusion of commission?

Thanks
 
Broker is way to go - otherwise banks hand registered your details and this can complicate broker attempts later.
Is your business affected by covid ?
 
cmalone said:
Broker is way to go - otherwise banks hand registered your details and this can complicate broker attempts later.
Is your business affected by covid ?
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Covid affected yes meaning I will need to re visit the application in a few months time, hoping to find a way of getting approved for more, maybe an exception would be better way to go.
RedOnion said:
In your circumstances, unless broker lies it won't make a difference.
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Can they lie?
If banks take what they say as the truth then maybe it's worth looking into one, not trying to deceive banks just unlock more of my commission for mortgage approval as the extra amount is multiplied by 3.5 can make a significant difference in the house we go for.
 
Jay jr said:
maybe an exception would be better way to go.
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Don't confuse 2 things.

Commission is allowed in calculating LTI for Central Bank rules. So you should be fine there.

But the banks apply their own underwriting rules as well, and each treat it differently.

Historically, brokers were suggested to deal with such scenarios. Banks didn't always follow up on paperwork, and done shocking stuff for through, like exaggerated earnings. Those days are gone. There are some cases which a broker will present in the right way, but your income is what it is.

The fact your commission is impacted by Covid-19 will impact in the short term on what you can borrow. Ideally you'd want to have 3 months commission to show the bank.
 
RedOnion said:
Commission is allowed in calculating LTI for Central Bank
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Source?

The original 2015 Statutory Instrument says
income” means the total gross annual income, before tax or other deductions, of the borrower
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which I've always found a little unclear.

If a borrower takes out a mortgage in January and is then unemployed from February to December, has the bank broken the regulation? If we base it on last year's income, what if my bonus or commission isn't as exceptional this year.
 
Found with BOI they can be quite restrictive - OH a public servant and they wouldn’t allow a lot of overtime and allowances etc. And punitively as he took the odd day of parental leave they reduced his base salary by 20%. As it was a tracker portal we were stuck with BOI and in the end my salary was increased so we were approved for the amount needed. But definitely shop around. Personally I’d go to each bank myself as opposed to using a broker but I don’t know if banks would be more lenient either way. It all depends on how underwriters deal with the application
 
Understand each time a bank does a ‘credit check’ it is recorded on the central register - so each will know where you’ve been previously. Broker should know exactly which bank offers what- they might even advise you to wait a period before rushing in with application, etc
 
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