Complex income mortgages

What is a complex income?

Income is classed as complex if it is made up of several different sources and/or can be variable. This could include, for example, someone with a full-time 9–5 job who also works in a pub on evenings and weekends. Or it could be someone with two (or more) part-time jobs, someone who is self-employed, or someone with income in the form of a pension plus investment dividends.

When applying for a mortgage it can be important that all sources of revenue are considered, as this gives a prospective lender a clear picture of your financial situation. This can also be beneficial if you are looking for an amount that is deemed at the height of your affordability limit.

The kinds of income you might receive – and would hope to have taken into account – can include (but are not limited to):

• Full-time wages
• Part-time wages
• Overtime payments
• Sales commission
• Annual (or other) bonuses
• Pension
• Investment income
• Dividends
• Interest on savings or investments
• Freelance earnings
• Rental income from buy-to-let
• Royalty payments
• Maintenance payments
• Government benefits

If you’re unsure if your income sources class as complex income, reach out today. Our advisors will be able to discuss and assess your situation, then give you an idea of your next steps.

Why a complex income can be an issue for mortgage lenders

Most high-street lenders like things to be nice and neat and easy to assess. They prefer clients with no gaps or marks on their credit history, and a regular income from a good employer.

That is why, ironically, it can sometimes be harder for an entrepreneur running a business to get a mortgage!

However, many people derive income from multiple sources or from self-employment, and while that income might be regular, it can also be variable. This makes it harder to assess risk when it comes to lending money, which makes some lenders cautious.

How to get a Complex Income Mortgage

As mentioned, a great starting point is to get in touch with a mortgage broker. They will have experience in dealing with complex income individuals and can advise you on the most suitable plan of action.

They are also likely to have connections to specialist lenders designed to deal with complex income individuals.

Another crucial thing to have prepared is your credit history. Having a good credit history will instantly make you more attractive to lenders. This is because it shows them you are able to borrow and repay money.

There are various steps you can take to improve your credit score before you apply. Our complete guide highlights some top tips to improve your credit in preparation for your mortgage application.

One final thing you can do to improve your chances is by providing a larger deposit. We know this is easier said than done, but it can greatly help you. By putting down a larger amount, lenders will see you as less of a risk, in turn offering you a more favourable deal.

So if you can, save up a few extra thousand pounds as it could save you even more money in interest over time.