Mortgages, wage slips and deductions for employer share save

[Ynox]

I'm looking into taking part in my employer's share save deal. This is extremely generous - getting on for doubling the return I invest (and way beats crappy ISA rates right now). This might result in some chunkyish deductions on my payslips (think in the region of £600-700/month).

Normally it'd be a no brainer, but I'm looking at selling my flat next year to get a house. House would be valued at ~£400-450k (so 4-4.5x joint earnings). The plan will be to sell the stock before applying for the mortgage.

How would mortgage companies take this? I'll have scaled back the deductions by the time we actually apply for the mortgage but if the mortgage company wanted 6 months of wage slips then this may result in a couple of the wage slips showing these large deductions.

[Sarnie]

Ynox said:

I'm looking into taking part in my employer's share save deal. This is extremely generous - getting on for doubling the return I invest (and way beats crappy ISA rates right now). This might result in some chunkyish deductions on my payslips (think in the region of £600-700/month).

Normally it'd be a no brainer, but I'm looking at selling my flat next year to get a house. House would be valued at ~£400-450k (so 4-4.5x joint earnings). The plan will be to sell the stock before applying for the mortgage.

How would mortgage companies take this? I'll have scaled back the deductions by the time we actually apply for the mortgage but if the mortgage company wanted 6 months of wage slips then this may result in a couple of the wage slips showing these large deductions.

They will see that your year-to-date totals don't add up to your stated salary and ask why.............ultimately, if you income is sufficient to secure the mortgage with the deductions taken into account then it won't be a problem.

[Ynox]

Hmm. Might be borderline, especially if end up ploughing in a fair bit of money to maximise the return.

Likelihood is I'll have reduced the deduction significantly by January, with the idea being to apply for the Mortgage sometime around the end of March.

[Sarnie]

Ynox said:

Likelihood is I'll have reduced the deduction significantly by January, with the idea being to apply for the Mortgage sometime around the end of March.

Your YTD figures still won't add up.....

[brickwall]

How does this work with AVCs on pensions? I'm currently putting a lot into my pension, on a completely voluntary basis, and on top of my employer's (already generous) contribution.

I think I'll still be fine on the affordability come renewal time in a few months, but will they take the AVCs into consideration?

[iantr]

Two thoughts:

1. If the amounts are variable (i.e. not contracted for) and can be reduced to zero I doubt they'll be relevant other than as evidence of good financial sense / saving habits.

2. You might want to check if there are ownership conditions attached to shares purchased through the scheme. Under some (many) schemes there are minimum holding periods that might be a problem if you need to sell them next year for your property purchase.