How will changes to income affect my mortgage application

Choice Mortgages UK

We’re actively managing the evolving impact of the coronavirus outbreak. During the pandemic, substantial changes are happening across the market, with some changes taking place hourly.

We are working our hardest to ensure you have all the relevant information you need.

At any point, should you grow concerned about what is happening, if you’re affected or even if you have questions, please contact us.

What’s Happening?

Individuals across the UK are being impacted by COVID-19 and many customers could face an impact on their income, whether self-employed, employed, permanent or temporary basis.

At this time, lenders’ primary purpose is to ensure that any mortgage provided is affordable to the customer.

What you need to know…

With immediate effect, lenders are making some changes to the way they assess and treat employed income. It applies to all customers where affordability assessments would be completed.

These changes also apply to applications that have been previously submitted both pre and post-offer. Customers need to notify us so we can inform the lender of any material change and this will all lenders to reassess affordability.

Customer Scenarios

Customers who have not and do not expect to experience a change in their employed income:

  • There should be no impact.

Customers who have or expect to have a reduction in their employed income:

  • If the customer can provide evidence of their revised income, this revised figure will be used when assessing affordability.
  • If the customer cannot provide evidence of their revised income, it is likely a mortgage offer will be withdrawn or placed on hold until such time evidence is available.

Customers who have been advised they are being placed on furlough (under the government Job Retention Scheme):

  • If the customer can provide evidence of this agreement and the income to be received during the furlough, it is likely the revised figure will be used when assessing affordability.

Customers who are no longer receiving employed income or have been told by their employer that their employed income will not continue, AND it is not being replaced by the government scheme:

  • Lenders will be unable to help with a mortgage application at this time.

We're here to help

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Choice Mortgages have provided me with a fantastic consultative service for over 10 years. I've had absolute peace of mind that everything related to my mortgage, home insurance, life insurance and critical illness insurance has been in hand. Nicki and the team have always given me informed guidance and I've had every confidence in their recommendations and products. A first-class service that I wouldn't hesitate to recommend.

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