Successful first time buyer mortgage application even with high proportion of commission income

£515,000 borrowing achieved at 2.63% on £615,000 London flat

Mortgage multiple of 5.5 x client’s full income realised to make first time property purchase achievable

Our client

Our client was a first time buyer working in IT who had changed jobs a year ago and was earning monthly commissions in addition to his basic salary.

He was looking to buy his first flat, with the help of his parents on raising the deposit, with the intention of upgrading to a house in future.

 What they needed

 The client found an ideal 2 bedroomed flat in London which would provide a perfect first step onto the property ladder.

The client needed to borrow £515,000 to purchase the £615,000 property.  

What was the challenge

Affordability criteria were the challenge for this client. 

Most lenders were unwilling to use just the average of the last 3 months of the client’s income which when annualised was higher than simply the client’s basic salary.

Most lenders would cap the commission payment value to the same level as his basic salary of £50k. Whereas, the client needed his full income including commissions to be multiplied by a factor of 5.5x to reach the level of borrowing he required.

How we provided the solution

Paul Asare, Associate, explored the mortgage market and through further research was able to find a lender who was willing to use 5.5x the client’s income, including their commissions, to secure the borrowing needed.

In line with RCP’s objectives and values, Paul went through a thorough process of leaving no stone unturned in his search to find the right lender for the right case. The client was absolutely delighted with the result and both he and his parents were pleased he was able to buy his first home.

What was the rate

The rate was 2.63% for this first time buyer with commission income.