If most of your income is based on commissions or bonuses, you must be wondering if you are eligible for a mortgage or not. And the answer is, Yes, you are eligible for a mortgage on your commission income. Many mortgage lenders can consider this form of income when accessing your affordability. However, it is also important to note that different lenders have different criteria in accessing your income which could impact the amount you could borrow. You also need to note the timings of your commission payments before starting your mortgage application. Before offering any loan, lenders would ensure that you can afford their mortgage payments or not.
This article will discuss how you can get a mortgage on commission income, the key things to understand, the lender’s criteria, and the eligibility requirements.
Lender’s Criteria for a mortgage on commission income:
Every lender has different standards in accessing your mortgage application on your income. Some of the major points to note before approaching any lender are discussed below:
How often is your commission paid?
Some lenders could ask for only monthly commissions, whereas others could also focus on your quarterly commission. In all scenarios, you have to provide valid proof of your income. Some lenders can only accept your application if you have consistency in your income from the commission discussed in our next point.
How consistent is your commission?
In scenarios, if your commission fluctuates every month, some lenders can only consider a small part of your income for the mortgage application. Inconsistency in your income could result in a limit on your borrowing amount. Its always better to contact a mortgage broker before starting your process.
How long are you getting commission income?
Along with the consistency of your income, some lenders will also show their interest in the period of your commission income. For example, some lenders could give you a mortgage on commission income if you are earning commissions from at least one year, but most lenders would prefer at least 2-3 years on your current commission income.
How much commission lenders will take into account?
Some lenders could count it as a percentage of your basic salary, and others could count it as a percentage of your actual commission. Different lenders calculate the size of your commission on a different basis, as some can only consider your recent commission, and some can go for an average of the last 1-2 years. So in case if your commission is increased in recent months, it could be the deciding factor on which lender you should approach.
Mortgage requirements for commission earners
You need to show different mandatory documents in front of a lender to get the mortgage with commission income. We have created the list of standard documents required by almost all the mortgage lenders for your application below:
- Utility bills
- Last three payslips with bonus and income mentioned
- Most recent p60 form
- Identity Proof
- Bank statements
- Other related documents
Please do note that the document requirement varies with the lender. In addition, some lenders can also ask for additional documents, so its important to consult a mortgage advisor before starting your mortgage application.
Getting a mortgage with a 100% commission-based job
Getting a mortgage with 100% of commission income is complicated because of fewer approachable lenders. Some lenders can have a flexible approach in mortgage affordability calculation. As an individual working on commission-based jobs, it is important to provide complete evidence of your income in front of lenders. When it comes to calculating your commission-based income, mortgage lenders will look for the continuation of your basic income as commissions. Commission income mortgage requires many documentations that you need to present, its advisable to contact a known mortgage broker for the right advice.
1. Can I have a mortgage with commission-based income and bad credit?
Yes, its possible, but it requires additional documentation that varies from lender to lender. Credit history is always an important factor for any mortgage application, its good to get mortgage advice before starting your application for commission-based income.
2. Can I get a buy to let with commission-based income?
Yes, you can get a commission income mortgage on a buy to let property, but some lenders could also ask for additional factors like age limit, clean credit, experience as a landlord etc.
3. Can you get a commission income mortgage?
Getting a commission income mortgage is possible, but you may need a specialised mortgage broker to start your application.
4. Which lenders could offer commission income mortgage?
Few lenders could offer you a mortgage on your commission income, but it depends on various factors. Please contact a known mortgage advisor before starting the application process.