Min wage for mortgage approval?

A

Advicepls

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Hi there

Just wondering if there is a minimum you need to be earning to qualify for a mortgage? Say for example my husband earns 80k and I earn 24k part time,would my wage be taken into account or is it too low?
TIA
 
Your income should be considered, but only to the extent to which it can be shown to be guaranteed, or at least sustainable. A lot more information is required to answer the question properly, though. Essential details include: how long you have been receiving this income, and the type of employment (PAYE, or self-employed). If your employment is permanent part-time for more than 6 (preferably 12) months, and your €24k is guaranteed, then the full amount should be taken into account by the banks. If you are on a short-term contract, that will make things more difficult, but some banks might take, say, 50% of this income into account. If the income fluctuates from week to week or month to month, then it may be difficult to prove that the €24k is a sustainable, ongoing income. If it is self-employed income, then you would need 2-3 full tax years of taxable earnings history, for the banks to factor it in.

Best Regards,
Dave Curry, Irish Mortgage Corporation
 
Dave

Not meaning to hijack the thread, but how are the banks currently treating discretionary bonuses?

e.g. An individual has no entitlement to a bonus, but received (say) €70k last year, €65k the year before, €60k the year before that, etc.

And how do the banks view share options in multinationals?

e.g. An applicant works for a tech company and has (say) unexercised share options worth €200k based on today's values.

Many thanks.
 
Gordon Gekko said:
Dave

Not meaning to hijack the thread, but how are the banks currently treating discretionary bonuses?

e.g. An individual has no entitlement to a bonus, but received (say) €70k last year, €65k the year before, €60k the year before that, etc.

And how do the banks view share options in multinationals?

e.g. An applicant works for a tech company and has (say) unexercised share options worth €200k based on today's values.

Many thanks.
Click to expand...
Lenders will take some additional income into account, but only when it has been shown to have been received in the past. This is crucial. I had a recent example where an applicant in a multinational had just got a promotion to a level where she receives a guaranteed 30% management bonus. This was verified in writing by the company's CFO. Not one of the banks would accept this - they only factored in the bonus that she had received in the previous year, which was a smaller % of her (then) lower basic salary.

Exactly how much they will factor in varies from one lender to the next (up to 50%). In your example, a very good case could be made to include €35k, i.e. 50% of the bonus received last year. Because of how far back the bonus can be shown, and its consistency, even the lenders who normally only take 25% of bonus or a maximum of 10% of basic salary into account could be persuaded to take at least 50% of the average, i.e. €32,500.

As far as share options go, they would not taken into account as income in any way, unless the structure is where the employee foregoes a taxable cash bonus in order to purchase shares. Share price fluctuations would be enough of an reason on its own to rule them out as being accepted as part of a person's long-term income. Other issues such as uncertainty about the long-term consistency and sustainability of such awards, or the average length of time people spend in each employment, would only add to reasons why they would not be added to income figures for assessment. All that said, if an application was very close to the borderline and needed a policy exception to get it over the line, then this could be a deciding factor in its favour.
 
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