Anyone used the new mortgage affordability rules?

[bigfatnick]

I'm trying to buy a new build at the moment, but using the recommended mortgage service is becoming a pain in the arse. It seems I need these guys to give me the go ahead and decide I can afford a house before I even put a reservation fee to secure the plot I want. Then I sort a mortgage out afterwards. (Ideally with somebody else).

The problem is, as a lorry driver, my wage is made up of two parts. My taxable wage and untaxed giveaways, I guess they could be classed as expenses. So you get the hourly rate, which is fine, and usually averages maybe £2k a month, before tax. And then I get £25 quid, every night I sleep in the lorry. This is tax free. And an industry wide thing, people usually getting between £20 and £30/night, depending on who they work for. This accounts for an average of £375 a month in my wage over the last few months. So a large proportion that I want to be included in the calculations.

The company doesn't seem to know if they can be included as it isn't strictly "pre tax income", they don't seem to care that I can sully two years of payslips showing my never earning a poor wage and it generally getting higher and higher as my boss likes me more. They only seem to care about my last 3 payslips. i don't think they are a great deal of use. I'm sure it'll get sorted, but I'm tearing my hair out not knowing if I can get the house I'm dreaming of. I honestly don't know where to find out, so as always, I turn to pistonheads, hoping that in its vast user group. Somebody will have some experience of these new affordability based mortgages.

Edited by bigfatnick on Monday 5th October 22:11

[bigfatnick]

Wombat3 said:

Long & short of it is if its not guaranteed (contracted) income , its unlikely they will count it IMO.

Well I'm currently drawing up a new contract with my boss for all this. (They're concerned I don't have a minimum number of hours, despite usually being paid fo 55ish hours a week.) I'm wondering if the contract garuntees a minimum or say three nights a week night out money they will count it then?

[bigfatnick]

eliot said:

I suspect the answer is not what you want to hear. They are only interested in your actual salary - overtime and bonus seem to be largely ignored now, let alone allowances for sleeping in your cab.
I remortgaged recently and they wanted all expenditure right down to sky and phone costs plus good evidence of earnings - in my case I had to provide three years of P11d's to backup what I had told them about my earnings.

Back to plan A then, buy a fancy caravan and sleep in my boss's yard.

[bigfatnick]

Cyder said:

eliot said:

I suspect the answer is not what you want to hear. They are only interested in your actual salary - overtime and bonus seem to be largely ignored now, let alone allowances for sleeping in your cab.
I remortgaged recently and they wanted all expenditure right down to sky and phone costs plus good evidence of earnings - in my case I had to provide three years of P11d's to backup what I had told them about my earnings.

That wasn't my experience when we bought our first place 9 months ago.
They took my overtime into account which adds about 15-20% to my salary by looking at 6months worth of payslips.

Interesting. Was this using the new mortgage rules? I'm not two fussed re, overtime as my new contract will state a high number of minimum hours (probably the lowest ive done in the last 6 months, maybe 47 or 50).

Common sense would say if they looked at my past two years payslips, they can see I earn plenty. But I guess they aren't interested in that.

[bigfatnick]

Sarnie said:

Your issue isn't the new affordability rules, your issue is that you are trying to use non-taxable income. As you mentioned, it's similar to expenses........

And this is totally a no-go? Even if I get it written up in my contract so it garuntees a fixed amount minimum every month?

[bigfatnick]

jammy_basturd said:

Sarnie said:

Sheepshanks said:

bigfatnick said:

Sarnie said:

Your issue isn't the new affordability rules, your issue is that you are trying to use non-taxable income. As you mentioned, it's similar to expenses........

And this is totally a no-go? Even if I get it written up in my contract so it garuntees a fixed amount minimum every month?

The thing is, the payment is tax free because HMRC thinks you should be spending that sort of amount on subsistence, bedding etc. So it's reimbursement of expenses - you're not supposed to come out ahead.

^^This.

In which case OP should not declare (to the mortgage co) any expenditure paid for by that overnight allowance.

Thanks all. The mortgage company has copies of my wage slips, so can see that these are there. However, I see everyone's point. I guess I have an answer now.

Edit - http://www.hmrc.gov.uk/manuals/eimanual/eim66130.h... not sure if this changes anything? It doesn't state that it's expenses, and clearly is all above the law. But states "Where the employer knows that the driver uses the sleeper cab, the amount paid free of tax should not exceed a reasonable reimbursement of:
evening meal and breakfast
washing facilities
upkeep of bedding in the cab.

Now where I go, washing is free, I bring my own food, and I wash my bed stuff at homes, so as far as I'm concerned there are no additional costs to if I was sleeping in my own bed at home (aside from maybe putting the washing machine once or twice more per month.


Thanks all.

Edited by bigfatnick on Tuesday 6th October 16:37

[bigfatnick]

Thanks a4cabrio. I'm on it!