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Mortgage Advisor & Director
Can salespeople get a mortgage?
As a salesperson, you may be concerned that a mortgage lender won't take into account your full earnings, including bonuses and commission.
If bonuses and commission make up a large portion of your salary, it can be challenging to demonstrate to a mainstream lender that you can keep up with monthly repayments.
Our team of experienced advisors can guide you through to find a lender that will take into account your entire salary.
At Teito, we have whole-of-market access and have helped many salespeople like you to get the best deal possible on their new mortgage. If you're ready to get started, complete our simple form today, or carry on reading to learn more.
Why can it be challenging for salespeople to get a mortgage?
Many mainstream lenders will be looking for a stable, monthly income from permanent employment.
If you work in sales, you are likely to earn a basic salary. You then receive incentivised bonuses and commission based on meeting sales targets or other Key Performance Indicators (KPIs).
Some lenders will not consider income received from bonuses and commission as part of their affordability calculation, meaning the mortgage offered may not meet your requirements. In the worst case, your application may be declined.
If this sounds familiar, fear not. There are mortgage providers who appreciate that not everyone has an ordinary, standard monthly income. By accepting bonuses and commission into the mortgage affordability calculation, your mortgage offer will be tailored to your role and needs. What's more, our experienced advisors can find you the best rates available on your new mortgage.
Will how often I'm paid make a difference?
All lenders are different. Some lenders will only accept monthly payments into the calculation, some will accept weekly, quarterly, and some will even accept annual payments.
Lenders will be concerned about how you can meet consistent monthly mortgage repayments if you do not meet your incentive targets.
Track record in commission-based earnings
Many lenders will expect you to demonstrate consistently earned commission revenue for a minimum of two to three years before they are satisfied. There are a few lenders who will consider commission earnings over 12 months, and there is a minority who will accept applications with less than 12 months.
How mortgage lenders treat your income
Some lenders cap the commission income they will accept into the affordability calculation to 100% of your basic wage.
For salespeople who earn the majority of their income through incentivised bonuses and commission, this can cause an issue.
For example, if your basic salary is £15,000 per annum, but you then earn an additional £25,000 on top in incentivised income, some lenders will cap your annual income at £30,000. However, there are a few lenders who will accept the full amount, so in this example, your salary would be counted as £40,000.
How much can I borrow on a commission income mortgage?
Another point to consider is the amount a mortgage provider will be willing to lend against your salary.
You can expect a minimum of three times salary, with some rising to five or even six times your salary, in some cases.
It may be that you consider a lender willing to lend a higher ratio even though they don't account for your full salary, rather than a lender who will account for your full salary but offer a lower multiplication. Our team can help you with this.
Getting a mortgage with bad credit
There are many reasons why you may have bad credit on your record, ranging through from a few missed payments to IVAs or bankruptcy.
While it may be more of a challenge to get a mortgage with bad credit, it is possible.
The lender will be concerned with the age and severity of the adverse credit. A few tips for improving your credit rating.
- Understand the factors that are affecting your credit rating by registering an account with the main agencies.
- Use credit sensibly and make repayments.
- Apply to make corrections to any inaccuracies.
Please read our guide to bad credit mortgages for more information.
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Will the type of property affect a bonus or commission mortgage?
There are more mortgage providers willing to lend on standard properties.
However, there are specialist lenders who will consider lending for non-standard properties, for example, timber-framed or high-rise buildings. This is a specialist area, and we would recommend using an experienced broker who can advise on the most suitable lenders.
Can I get a Buy to Let mortgage with commission and bonus income?
It may be easier than you think to get a mortgage on a buy-to-let property with a non-conventional income.
This is because the property itself is generating a regular income to make mortgage repayments. As someone with a predominantly bonus and commission-based income considering a buy-to-let investment, there are a few points to note:
- You may find that some lenders will insist on a clean credit history
- Experience as a landlord will help.
- If the Buy to Let property is a House of Multiple Occupants, you'll need a specialist lender.
- It may be more difficult for over 75s.
- Some lenders will insist on a minimum salary.
How can I learn more?
Complete our online form today to get started, and an advisor experienced in securing bonus and commission-based mortgages will be in touch.
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.