I want to get a Mortgage with maintenance payments as part of my income. How does it work?
To get a mortgage with maintenance payments alone is not possible. If however, you or a fellow applicant has a job then the maintenance payments could potentially be factored in.
There are no general rules when it comes to using maintenance payments in determining your mortgage affordability as it is very much down the individual Mortgage Lender. As a Mortgage Broker that specialises in complex mortgage cases, such as mortgages with maintenance payments, I have experience in selecting the Mortgage Lender’s that will provide the most favorable responses.
Things to watch out for when choosing your maintenance payments Mortgage Lender:
- The size of the maintenance payment.
You’d think the bigger the better! However, Mortgage Lenders will not want this element of income to be the largest portion of earnings in case for an unforeseen reason it stops or indeed it comes to a natural end mid-mortgage term due to the children becoming financially independent / adults. As a guideline some Mortgage Lenders even stipulate that it can only be a certain percentage of overall income or less than basic earned income.
- Set amount.
The Mortgage Lender will probably insist on your last 3/6 months’ bank statements to see the payments are genuine and at a constant level. Fluctuations in payments suggests an informal arrangement that could stop without warning and will ring alarm bells in the Mortgage Underwriter’s ears.
- Can I get a mortgage if my maintenance payments for not on a Court order?
If the maintenance is on a Court Order then the Mortgage Lender will feel much more reassured. The Mortgage Lender will reference the Court Order to see the amount due, duration and other terms for payment. If there is not a Court Order in place then it is not uncommon to extend the bank statement request to take in the last 6 months or flatly turn the case down.
- How much of the maintenance payment can be taken when I apply for a mortgage?
This will depend on the Mortgage Lender and we can help with the selection in this regard. Normally, most Mortgage Lenders will consider 50% of the maintenance income provided it is on a Court Order. We do however have Mortgage Lenders that will consider taking 100% irrespective of a Court Order.
For more information on getting a mortgage with maintenance payments, please call us on T: 020 7993 2044.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.