Mortgage Advisor & Director
Mortgage Advisor & Director
Investment income, such as stocks and shares and rental income can help build a more comfortable lifestyle, but can you use it to qualify for a mortgage? We look at whether you can use this type of income, what to consider, and how to source the most suitable lender for your mortgage needs.
Does investment income count towards a mortgage application?
Investment income can certainly count as a part of your income on a mortgage application. It can even be beneficial, as it will increase your overall income and diversify your income sources, providing additional stability compared to a single income source.
However, this can also make things a bit more difficult for two reasons:
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If you’re looking to supplement your standard employed income with your investment income as a way to borrow a larger mortgage, most lenders will see this as a complex income structure. This is purely because your income comes from multiple streams and can be harder to work with.
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If you’re planning to take out a mortgage exclusively with investment income, for example, if you’re a portfolio landlord, it will be seen as self-employed income, and therefore considered slightly higher risk on this basis.
It’s also worth noting that although most lenders will accept investment income, the types that they accept and how they treat it can vary from one lender to the next.
Types of investments you can declare
If you have income from investments, including stocks and shares, a trust fund, dividends, capital gain or property and other physical assets, they will usually be considered as income by most mortgage lenders.
However, the stability and performance of your investments will typically be the main determining factor, rather than the type of investment. Most lenders will need to see plenty of evidence of past and current performance through tax returns or bank statements.
How we can help maximise your affordability
Investment income can be complex, but could be the difference between being able to afford the house of your dreams or not. That’s why it’s important to find a lender who will put your specific type of investment income to the best use when assessing your affordability.
At Teito we can help you maximise the value of your investment income by helping you to:
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Find a lender who accepts 100% of any investment income - Not all lenders will consider 100% of your investment income, especially if it’s secondary or supplementary to your main income. Some will only consider a maximum of 50% of your combined investment income, whereas others will consider more of one and less of another, depending on the specific type and risk factor
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Finding a lender who accepts complex income - Finding lenders that accept complex income (from multiple sources) can be harder, especially if this is your main source of income for the application. The more complex your income, the fewer lenders that are likely to be able to help, a most don’t have the capacity to work with this type of financing
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Finding a lender who offers higher income multiples based on overall income - some lenders will increase the income multiple they’ll lend to 6 times or even higher, however, this is simpler if you earn a high income from one source. It becomes more difficult when you have multiple income streams, however, there are lenders willing to offer higher income multiple loans to those with a complex income
You can book in a free, no-obligation chat with a mortgage broker who specialises in investment income below:
Get bespoke advice about investment income mortgages
How much you can borrow with investment income
Getting a mortgage with investment income won’t necessarily change how much you can borrow. It depends on how much it increases your overall income, whether lenders will consider all of it in support of your application, and how reliable it is.
Mortgage affordability is based on both the size of your expendable income, and how stable it is. If you’re using investments as your main income, you might not be able to borrow as much as someone with the same level of income from standard employment, for example.
Depending on what percentage of your income is made up of investments, some lenders may reduce the maximum LTV of the loan they’re willing to offer to balance some of the risk.
To get a rough idea of the amount you could borrow, enter your total annual income, including investments, into our affordability calculator below:
Which lenders will accept investment income?
The more complex your income portfolio, the more likely you are to need a specialist mortgage lender, as they generally have more flexibility in this area. However, some high street banks will accept some types of investment income as supplemental income.
Most will also accept an application where your main source is investment income from buy-to-let property, especially if you’re re-investing it to expand your portfolio.
Lenders will to offer mortgages based on investment income include
Why choose Teito for your mortgage needs?
When it comes to securing mortgages with investment income or other complex means, it’s vital to approach the right lender, as each looks at income so differently that it can impact how much you can borrow, but more importantly, whether you can borrow at all.
At Teito, we’re experienced in securing investment income mortgages, so no matter how complex your income is, we can find the ideal mortgage for your individual situation.
We work with more than 100 lenders who offer over 20,000 deals between them, and we know which are the most likely to lend on investment income. We can even advise which lenders will consider all or most of your supplemental investment income, to help you achieve the finance you’re looking for.
Our 5-star rated service provides an entirely free initial consultation, so you have nothing to lose by reaching out to see how we can help - get started here.
FAQs
It’s a high probability that you’ll need a larger deposit if you’re using investment income to take out a mortgage, particularly if this will be your main supporting income on the application. If you have a complex income portfolio, it’s a good idea to offer as much as you can in the way of a deposit, but be prepared to pay a minimum of around 15-20% if you’re looking at a high street application.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.