Am I looking for the mortgage I can't have?

I

Iwant

Guest
Hi,

I'm wondering if someone can help me? Myself and a friend are first time buyers lookingt to buy soon. We're looking at about 400,000. We have 40,000 between us.

My friend earns about 35,000. I earn 40,000, but this is split between two jobs. My first job I earn 30,000 and can prove this with P60.
My second job, I'm assured is above board in that the employer is paying my tax...but I'm not on the books as if I was it wouldn't be worth my while. They're willing to provide me with a letter to say that this is my income though. BTW, this 7,000 is net! So the ten gross is an approximation.

We can both prove that repayments would not be a problem at all. Doing a quick calc a 400,000 mortgage over 30 years is approx 15-1600 pm. My disposable would be about 2000 pm, so my repaymenst (say 800) would only be 40% of disposable. My friend would be in a similar position.

On the one hand I hear from some people that mortgages are given on a strict multiple of earnings, while on the other hand some people tell me that this isn't the case and if you can prove to your friendly bank manager that repayments will be no problem then they'll give you the mortgage!!!

We have yet to go to a bank manager or lending institution and will do soon, but I thought some people in the know might be able to help shed some light on our situation?

Many thanks.
 
Can't answer the mortgage question I'm afraid but on the point of buying with another person make sure that you put in place a suitable clear and binding agreement:
 
Hi,

If you can show the second job income by way of lodgements to your bank account, payslips, etc., if it is feasible for you to do both jobs long term and if the property has more than two bedrooms (i.e. you can avail of rent-a-room) you would get close to the €360k you're looking for. Based on 30 years at 3.15% the gross repayments would be €1550 per month. Do think this through very carefully though, what happens if one of the three jobs (between you) falls through? Is there really no sutiable properties in your area under €400k?

Kind regards,

Sarah

www.rea.ie
 
O Postings

O do u have to reply to everything even though it may not be relevant???
 
Re: O Postings

O's posting is very relevant O 2. And the relevance of your post is???

Sarah.
 
.

Thanks Saran.

Some people, eh...? :rolleyes

(Still can't log in :| )
 
Thanks Guys

Hi,
Problems posting at the moment.

Thanks O for the link. Have read before and will use the agreement when the time comes. Post is relevant BTW.

Thanks Sarah for swift reply. I get my money in an envelope for my other job, so might not be possible to show lodgements etc...This money is usually what I spend week by week. I've been told though that it's not a "brown envelope". My employer does pay tax before I get the money. But no P60 obviously. Would a letter from employer be enough if I explained situation?
As to whether there's anything under 400...there might be. But where we're looking right now, that's in or around what we're looking at for a 3 bed
 
Re: Thanks Guys

The situation with respect to the second job sounds very dodgy to me and you would be well advised to regulalrise the situation before embarking on a house purchase in my view.
 
0oer Matron

To defend O this is my first post in the thread!

Agree with 0 and Tommy. The tax situation with your second employer cannot be correct. Either you are a contractor, responsible for your own tax affairs, or you are a PAYE employee and should be on books.

That said many lenders will take such income into account.
 
Second Job

Hi again,

The deal with my second job is this. I'm only doing it because I don't declare on it. If I had to pay tax it wouldn't be worth my while working there!

Do you think many bank managers would understand this situation and come to an agreement on it, outside of the normal P60, payslip situation?
 
Re: 0oer Matron

I agree with comments regarding the second income but disagree with O - lenders will not take non-taxable income into account. Taxable income must be verified by payslips or bank statements and a salary certificate.

Sarah

www.rea.ie
 
Nixer

It's basically a nixer..but one that is on a part-time permanent basis if you know what I mean!!
 
Re: Nixer

I still don't understand - you say that the employer is paying tax but that you're "not on the books" and no P60 is forthcoming and then that it's a "nixer"... It just doesn't add up. Either it's legit income which has been declared for tax purposes or it's not. Maybe you can clarify? If it's undeclared/untaxed income then you are taking a big risk especially if you embark on a house purchase. The chances of the Revenue catching up and demanding payment of outstanding tax (and possibly interest and penalties) are not insignificant. This would be bad enough in normal circumstances but it would jeopardise your chances of buying a house or being able to service any mortgage that you take out. Better to regularise the situation (i.e. ensure that the income is declared/taxed or else terminate the employment arrangement) as a matter of urgency in my view.
 
Thanks

Thanks Sarah,

I guess I will have to re-think that part of my mortgage application.
 
Clarification

Tobe honest, I'm not totally sure what my employer is doing...and up until now I haven't cared. I'm aware that it's not legal.
In terms of using it to secure a mortgage how would the inland revenue catch up with me over this. This is a genuine question...not being smart. Just not aware of how this works? Thanks.
I could of course just not use it for my mortgage in which case I've little to worry about.
 
Re: Clarification

Inland Revenue suggests that you may be located in the UK (GB or NI)? Or did you simply mean Revenue? The Revenue have various ways of catching up with tax evaders. Even if it takes years. Just look at the bogus non resident account holders for example. Don't chance it...
 
I meant...

I meant Revenue.

Yes...food for thought. But as I'm anonymous in this job, I don't think they can catch me to be honest. In all fairness, how many people in this country do nixers? I doubt the revenue catches up with the vast majority of them. They're generally only interested in the big fish aren't they?
 
Re: I meant...

But as I'm anonymous in this job, I don't think they can catch me to be honest.
Click to expand...

I don't think that this guarantees anything.

In all fairness, how many people in this country do nixers? I doubt the revenue catches up with the vast majority of them.
Click to expand...

And how many names appear on the Revenue defaulters list - and these are only the ones with liabilities in excess of some minimum amount (€10K or something like that?).

They're generally only interested in the big fish aren't they?
Click to expand...

Not any more as far as I know. For example they have said that they'll be making sure that First Active shareholders (who received between €3,000 and €6,000 in most cases) are pursued for their full CGT liabilities if they don't volunteer to pay.

Anyway, I'm just trying to give you some prudent help here. Feel free to ignore it if you want to take the risk.
 
Re: I meant...

Is the 'Will I be caught?' the only issue for you?

How about the 'Am I breaking the law?' issue? Or the 'Is my employer undercutting other businesses who stay within the law and putting them out of business?' issue? Or the 'Am I going to be able to buy the house ahead of a taxpayer who stays legal?' issue? Any qualms of guilt rubbing against your conscience here?

But if not, just think of all those people in the 80's who were so certain that Revenue would never catch up with their bogus non-resident accounts - They are now facing Revenue bills for the overdue tax, plus interest, plus penalties, plus the costs of an accountant to sort out their mess. See ya in the Revenue published list around 2012.....
 
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