Getting a mortgage is a significant milestone for anyone looking to own a home. However, the traditional income styles don’t fit everyone’s financial situation. By this we mean a predictable, steady income.
For those with complex financial situations, getting a mortgage may initially seem daunting. We’re here to bust that wide open, and let you know that not only is it possible to get a mortgage with a complex income, it can actually be just as simple as a traditionally employed person.
Let’s dive into what a complex income looks like, what challenges you may encounter, and how you can navigate them to achieve your dream of homeownership.
Understanding complex incomes and mortgages
A complex income can look like many things, but there are several common factors that come into play. While there are different factors that may affect your income, many believe that people with complex incomes usually don’t have conventional nine-to-five jobs. This is often true, but is not always the case. Let’s explore this:
Complicated or adverse credit
If you have a complex credit history, you may have substantial debt under your name. This could be credit card debt or student loans. While it doesn’t necessarily mean that you have a bad credit score, the amount of debt you have may prompt lenders to exercise caution.
Adverse credit, however, is when your credit score is below what the lender deems acceptable for a mortgage. This could be because of missed payments, account arrears, County Court Judgements (CCJs), debt management plans, or bankruptcy proceedings.
Complex incomes
Having multiple streams of income from a variety of sources may mean that you have a complex income. This could be from employment, whether full-time or part-time, investments, rent, or a wide spread of channels.
This doesn’t have to include self-employed borrowers, as even standard employees may have fluctuating incomes, such as bonuses or overtime.
Variable incomes
Unlike employees with regular, predictable pay checks, those with income fluctuations throughout the year may find it more challenging to show financial stability to a lender.
Working life and complex incomes
The changing landscape of work and income sources in the modern world has led to an array of complex income circumstances. While the above may play into it, some of the most common “non-traditional” jobs include:
- Self-employment and freelancing
- Part-time workers
- Commission-based employment
- Rental income
- Non-traditional income sources
How to get a mortgage with a complex income
Let’s first start with some challenges you may face if you’re looking for a mortgage but have a complex income.
First, most high street lenders prefer straightforward mortgages, which is what they deem low-risk mortgages. Borrowers with complex incomes may have gaps in their employment, an inconsistent credit history, or irregular income patterns, all of which factor into risk and affordability assessments.
Second, while many lenders will offer mortgages to those with complex incomes, they may require a bigger deposit to ensure their investment is taken care of should you be unable to afford your repayments. You may also encounter higher interest rates, but this will depend on the lender’s policies.
Despite the above, it is more than possible to get a mortgage with a complex income. Here’s a few ways you can improve your chances:
Prepare and organise your finances
When you’re preparing to get a mortgage, make sure you take the time to consolidate your tax documents, such as SA302s and Tax Overview documents. This will help provide a robust overview of your income. If you’re earning any overseas income, be sure to consult with an accountant to help organise your tax information.
Review your credit score
A few months before you’re ready to get a mortgage, be sure to check your credit score. This gives you time to address any issues before you apply. If your credit history is patchy, there are still ample lenders who may consider your application.
Choose the right mortgage product
It’s important to be realistic about the amount you can afford, and the deposit you’re able to bring to the table. Some lenders may be more accommodating, but one of the best ways to ensure you’re finding a mortgage product that suits your needs and circumstances is to work with an expert.
Get professional mortgage advice
If you’re aiming to get a mortgage with a complex income, we recommend you take advantage of the expertise provided by a mortgage adviser. Many have experience in handling complex income cases and can guide you through the entire application process.
Not only that, but they can provide recommendations and connect you with specialist lenders who specifically work with borrowers with more complicated financial histories.
Confidence is key!
It’s important to remember that the mortgage market is always evolving and new, specialised mortgage products are always coming onto the market. This growing flexibility is good news for borrowers, even if their income doesn’t fit the traditional mould.
Getting a mortgage with a complex income may require a little more legwork, but it is far from impossible. With the right preparation, professional guidance, and a clear understanding of your financial situation, you too can unlock the door to homeownership.
The key is to be proactive, organised, and open to exploring the diverse mortgage options available to you in today’s evolving market.
Get in touch with us today and let’s discuss your options. We have access to 12,000+ mortgage products and more than 90 lenders, so we’re perfectly placed to help you find a mortgage that suits your unique needs.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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