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Original poster

Mortgage and overtime

34 replies

nolimitstoday · 28/01/2023 17:27

I have started a new job and will soon be applying for a mortgage.

In my job I earn a basic salary, but I can double that as there is pretty much unlimited overtime. I currently do not do the overtime as I am still training and don't really need to do extra.

When I apply for a mortgage could I get a letter from HR or whoever it concerns for the bank to say that I can earn XYZ with overtime?

OP posts:
Overthebow · 28/01/2023 17:30

You would probably need to work the overtime for a while before so that you have consistent payslips with it on. Just a word that you may be able to work it probably wouldn’t be good enough.

CouldOfIsntRight · 28/01/2023 17:30

It would probably be better to start to do the overtime now so that it’s on your payslips as proof of earnings.

Original poster
nolimitstoday · 28/01/2023 17:36

Yes that makes sense, but I am extremely tired at the moment learning something new and I need a lot of sleep!

Do they need 3 months payslips if it is s new job?

OP posts:
Suzi9989 · 28/01/2023 17:50

We did this with nationwide but had to show 3 mths of payslips as prove. ( Already started earning bonus) which they accepted. Good luck 👍🏼

RubyPip · 28/01/2023 17:52

I did my mortgage application last month, my contract hours are only 15 a week but I work 30ish.

There is a section on the application forms to state this - I put my basic salary according to my contract hours and added the additional salary as 'overtime'.

This wasn't an issue at all and I needed to provide one month's payslip.

Original poster
nolimitstoday · 28/01/2023 17:57

Ok so doing the overtime is necessary?

OP posts:
NoWordForFluffy · 28/01/2023 18:03

nolimitstoday · 28/01/2023 17:57

Ok so doing the overtime is necessary?

You can find mortgage providers' criteria re overtime, bonus, benefits etc online. E.g. here are Nationwide's. If you search other lenders you can see what they say too.

RubyPip · 28/01/2023 18:07

nolimitstoday · 28/01/2023 17:57

Ok so doing the overtime is necessary?

Entirely depends on how much you want to borrow, and the lender's criteria. But of course the more you earn then the better, really!

Original poster
nolimitstoday · 28/01/2023 18:14

Thank you that is so helpful Flowers

OP posts:
good96 · 28/01/2023 18:51

Unless the overtime is contractual which in most cases it isn’t then you probably won’t be able to get confirmation of your salary with overtime - as this can vary? If you consistently do overtime, could you not consider asking your employer to increase your contracted hours?
Obviously your mortgage lender will see what you earn when you provide them with bank statements and will see what your outgoings are vs incoming and whether you can afford the repayments on the mortgage.

good96 · 28/01/2023 18:53

Although to add, overtime can be cut just like that, so your income would be impacted - I would definitely recommend looking to get extra ‘security’ with your contracted hours…

Overthebow · 28/01/2023 18:53

nolimitstoday · 28/01/2023 17:36

Yes that makes sense, but I am extremely tired at the moment learning something new and I need a lot of sleep!

Do they need 3 months payslips if it is s new job?

Sometimes 3 months, sometimes 6 months depending on the mortgage provider. To get a bonus included we provided 6 months so they could see a track record of getting it every month.

Original poster
nolimitstoday · 28/01/2023 18:57

No it doesn't really work like that. Overtime is there if you want it, we aren't made to do it, but it is unlimited. I don't really want to be contracted to having to do it.

OP posts:
Yoyooo · 28/01/2023 18:59

Are you able to up your hours instead?

Original poster
nolimitstoday · 28/01/2023 19:01

To be clear my contract is 37.5 hours, but we can do overtime above that.

OP posts:
Overthebow · 28/01/2023 19:04

I just don’t think it works like that, you need to be consistently doing the extra hours for a while before. I dropped my hours on return form mat leave and we got a new mortgage, they took my new hours not my full time hours even though I can up them anytime I want.

DelurkingAJ · 28/01/2023 19:06

You’ll need some evidence that you can get it, I expect. I get an annual bonus and they wanted the payslips from the last three years and took an average.

Original poster
nolimitstoday · 28/01/2023 19:14

Looks like I will be doing the overtime then! I better get some early nights!

Thanks everyone

OP posts:
Cancersurvivor · 28/01/2023 19:33

Hi you will have to show your latest 3 months payslips, showing O/T details on the 3 payslips, your mortgage provider will take an average of the said overtime to calculate in your overall borrowing amount. I used to work for Halifax Mortgages.

RubyPip · 28/01/2023 20:05

Cancersurvivor · 28/01/2023 19:33

Hi you will have to show your latest 3 months payslips, showing O/T details on the 3 payslips, your mortgage provider will take an average of the said overtime to calculate in your overall borrowing amount. I used to work for Halifax Mortgages.

I was only asked for 1 month's worth of payslips, so there are exceptions, I was expecting to be asked for 3 though!

Eminybob · 28/01/2023 20:15

Mortgage underwriter here.
Most lenders use an average of your last 3 months overtime. They may also cross reference this against your year to date figure from your last payslip, or your p60, to see if the o/t has been consistent throughout the year or if inflated over the last 3 months.
And it will probably only be used at 50% for income multiples.

Original poster
nolimitstoday · 28/01/2023 20:37

I think I should start preparing for when I apply for a mortgage in that case.

What is the minimum amount you can borrow for a mortgage? I will only need a small amount.

OP posts:
RubyPip · 29/01/2023 07:08

nolimitstoday · 28/01/2023 20:37

I think I should start preparing for when I apply for a mortgage in that case.

What is the minimum amount you can borrow for a mortgage? I will only need a small amount.

Again this depends on the lender. It can be as low as £10k or as much as £50k.

Try this tool from Money Saving Expert, it's brilliant. The site also clearly explains the difference between the different mortgage types. I remember feeling very overwhelmed taking out my first mortgage but honestly it's very easy!

Have you checked your credit score via Experian? That's worth doing.

SD1978 · 29/01/2023 07:13

Three months of payslips is the usual, so you need to be doing the hours, they usually won't accept you could theoretically do the hours. So settle in and start the overtime before applying.

Original poster
nolimitstoday · 29/01/2023 07:45

@RubyPip no I haven't checked my credit score. I will definitely do that

What tool were you speaking of on Money Saving Expert?

Yes @SD1978 I will buckle up for some extra hours! Wish I was 20 again!

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