5x income mortgage with lender accepting 100% of future bonus
The client needed to use 100% of bonus income to achieve 5x income mortgage value.
Seeking a 5x income mortgage of £867,000 on the purchase price of £ £1,020,000.
The existing bank declined the application so the client was anxious for help.
Our client had been working for her firm for over 5 years and had recently been promoted. She was seeking an 85% mortgage of £867,000 to purchase a house for £1,020,000.
What was needed
The client needed a lender who would consider her bonus income in the affordability assessment so she could borrow sufficient funds to purchase the property she wanted with a 5x income mortgage. When she was promoted to her new role, the timing of her bonus payment was altered.
What was the challenge?
In her former role, the client received her bonuses in August. However, her promotion took place in February 2021, and in her new role, her bonus wouldn’t be paid until December.
She approached her bank who told her they could offer her the mortgage she needed. However, when the application was submitted it was declined due to the altered bonus history.
The issue was that the application was submitted in September with bonus payslips for August 2019 and August 2020. There was no bonus paid in August 2021 because of the client’s promotion as her bonus is now due in December 2021. This meant the case failed on affordability because the underwriter did not want to consider any bonus income.
Despite the client having a letter from Human Resources confirming the future bonus payment for December including what the minimum amount would be, the lender still wouldn’t consider the client’s bonus income in their affordability calculations.
How we provided the solution
Jerome Fick, Executive Director, immediately understood the client’s predicament, and using his extensive mortgage contacts approached several lenders.
Initially, none of the lenders he spoke to were willing to include the previous bonus in their affordability assessment as there was no evidence of a 2-year track record of bonuses anymore, due to the missing August 2021 bonus. The lenders were reluctant to use the future bonus, despite the confirmation from HR.
After much searching and discussion, Jerome unearthed a lender who was willing to apply 100% of the previous bonus and offer the client a mortgage of 5 times her income.
The client was relieved and delighted at the service provided by London Mortgage broker Rose Capital and in particular Jerome’s tenacious approach which proved so successful.
What was the rate
The mortgage rate for a 2-year fixed at 85% loan to value was 1.99%.
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Rose Capital Partners Limited is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority.