Acceptable Income Types | Mortgage Brokers | NatWest International


For Mortgage Brokers
Acceptable income types

To include income for your customer it must be evidenced. 

Please contact us if you wish us to include benefits/allowances when considering affordability or if you are uncertain of our requirements.

In order to assess affordability we must be able to establish income net of any taxes and any other deductions at source payable by the customer.

Mortgage Broker talking with clients

FOR MORTGAGE BROKERS REGULATED BY THE FINANCIAL CONDUCT AUTHORITY

Definitions of income type

Salary from employment
Net salary, tax paid

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
3 months

Acceptable supporting evidence
3 months payslips and letter from employer.

Please contact us if the above is not available as we can also consider last 2 years tax assessments or employment contract.

Notes
There needs to be 6 months continuous employment although this does not necessarily need to be with the same employer. A period of time for holidays up to a maximum of 3 weeks between employers is considered acceptable.

Salary from employment
Income earned tax free

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
3 months

Acceptable supporting evidence
3 months payslips and letter from employer.

Notes
There needs to be 6 months continuous employment although this does not necessarily need to be with the same employer. A period of time for holidays up to a maximum of 3 weeks between employers is considered acceptable.

Commission income
If main income is commission based

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
6 months annualised if additional income or;
100% average of the last 2 years if main income

Evidence period
6 months if additional income or;
2 years if main income

Acceptable supporting evidence
Payslips, employment contract or letter from employer.

Notes
Paid over a regular period. If main income is commission based, evidence of the previous 2 years required.

Please note: Commission is deemed 'main income' if it comprises over 50% of the earned income from employment sources.

Contractor income
Employment contract and letter from employer

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
12 months

Acceptable supporting evidence
Employment contract and letter from employer.

Notes
Confirmation that a current contract for further work is in place. Confirmation of actual earnings and demonstrate consistent levels of income.

Self employed
Salary drawings, dividends or net profit drawn from business

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
2 years

Acceptable supporting evidence
Audited accounts and Income Tax assessments.

The year end date on the most recent accounts / income tax returns must be the most recent and must not be dated more that 18 months before the date of application.

Notes
A shareholder of 20% or more.

Must have a top tier globally recognised accountant or an accountant that is part of an international accountancy network that is actively involved in the customer’s financial affairs.

Please contact us for details.

Rental income

Rental Income
UK property

All income must be evidenced to be included when we consider affordability .

Acceptable supporting evidence
Rental income from existing UK based buy to let/investment property can be used.

For jointly owned property (e.g. with friends or partnership) the share of rental income that our customer is entitled to should be included.

Also refer to Buy to Let Additional Considerations in respect of Portfolio Landlords who own 4 - 10 properties.

We do not lend by way of Buy to Lets to Professional landlords. These are identified by the number of properties they own, or will own, being greater than 10.

Notes
We will verify UK rental income on existing properties from the additional information provided by your customer.

Rental Income
Overseas property

All income must be evidenced to be included when we consider affordability .

Acceptable supporting evidence
Non-UK rental income is acceptable subject to its country of origin and currency. Please call us for details.

Please note: If the income is accepted, we can only use sensitised Overseas Rental Income to the extent of the sensitised Overseas Mortgage Payment 

We cannot use surplus overseas rental income in the affordability assessment.

For jointly owned property (e.g. with friends or partnership) the share of rental income that our customer is entitled to should be included.

Notes
2 years finalised accounts or income tax assessments or 3 months bank statements. Sight of the tenancy agreement may also be acceptable.

Allowances, bonuses and overtime

Allowances
If part of employment contract

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
3 months

Acceptable supporting evidence
Payslips, employment contract or letter from employer.

Notes
If part of employment contract.

Bonus
Guaranteed net income

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100% cash bonus

Evidence period
2 years or employment contract

Acceptable supporting evidence
Payslips, or letter from employer.

Please provide details of any claw back provisions.

Notes
Must be verified as guaranteed by the employer.

Annual Cash Bonus.

Stock options are generally not accepted please contact us to discuss.

Bonus
Discretionary net income (Performance related)

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
50% average of the last 2 years cash bonus

Evidence period
2 years

Acceptable supporting evidence
Payslips, or letter from employer.

Please provide details of any claw back provisions.

Notes
Needs to be a minimum track record with same employer.

Stock options are generally not accepted please call us to discuss.

Overtime
Regular or fluctuating

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100% average last 6 or 12 months (annualised)

Evidence period
6 or 12 months

Acceptable supporting evidence
Payslips, or letter from employer.

Notes
Evidence on a monthly or weekly basis.

6 months regular overtime annualised. 

If the overtime is seasonal or varies considerably month on month, an average over 12 months should be used.

Other income

Maintenance

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
6 months

Acceptable supporting evidence
Court Order and bank statements.

Notes
We can accept income from court ordered maintenance, child maintenance, and income from family-based or non-court ordered maintenance and child maintenance provided that the payments have been in place for at least six months and are expected to continue at the current level for the foreseeable future, taking into account the age of children. We will when assessing affordability consider the future impact of any Maintenance payments that end.

Partnership distributions

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
Up to 100%

Evidence period
2 years

Acceptable supporting evidence
Letter from employer.

Notes
Professional practices only

Note that regular monthly drawings which do not fluctuate according to individual or firm's performance will be treated in the same way as regular employee income and may be evidenced in the same way.

Private pension

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
100%

Evidence period
3 months

Acceptable supporting evidence
Pension payslips/statements, bank account.

Notes

Regular investment income

All income must be evidenced to be included when we consider affordability .

Income type
Dividends etc

Evidence period
2 years

Acceptable supporting evidence
Bank accounts, Income Tax assessments, annual/regular portfolio statement showing income.

Notes
Please contact us for details.

Generally we are look at 90% of last year’s income or 100% of the average of last 2 years income unless there has been (or expected to be) a material reduction in the portfolio value.

Generally we expect there will be a diversified investment portfolio with a minimum value of £1m managed by an internationally recognised investment/fund manager.

Regular trust income

All income must be evidenced to be included when we consider affordability .

Evidence period
2 years

Acceptable supporting evidence
Bank accounts, Income Tax assessments or annual/regular portfolio statement showing income

and

Letter from trust confirming last 2 years income and sustainability/continuity.

Notes
Please contact us for details.

Generally we look at 90% of last years income or 100% of the average of the last 2 years income unless there has been (or expected to be) a material reduction/variance.

Income for actors, personalities, entertainers or sports people

All income must be evidenced to be included when we consider affordability .

Percentage of income that we will take into account
Up to 100% average over last 3 years

Evidence period
3 years

Acceptable supporting evidence
Please contact us for details.

Notes
We may consider contract income, appearance fees, royalties and image rights.

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