What is meant by Complex Income?

Everyone’s income streams are different and some people don’t have predictable incomes. For those that are self-employed or who have income from more than one source, it can sometimes be difficult to get a mortgage. 

When you apply for a mortgage, you need an income. When you are an employee, you receive a weekly or monthly salary that is usually paid monthly in consistent amounts into your bank account. Not everyone has this kind of income because some people have more than once source of income or are self-employed, freelancers, contractors, or business owners. This can mean that they can have fluctuating levels of income, even when they may earn a sufficient amount overall to afford a mortgage. 

Cases such as these are often referred to as ‘Complex Income’ mortgages. Having a complex income can make some mortgage lenders more wary of lending to you. 

What is a complex credit mortgage?

Put simply, a complex income mortgage is when the potential borrower has a financial situation or need that differs from the ‘average’ person looking to use a loan to purchase or remortgage a property. The most common forms of complexity are:

  • multiple income sources e.g. both employed and self-employed income
  • solely self-employed income but from varying sources
  • employed bonus and commission income which is greater than their basic salary
  • contracting income which might be via Limited Company or under an Umbrella Company
  • freelance income
  • foreign currency income
  • income from investments or property 

Will having complex income affect my mortgage application?

Lenders do prefer applications that are simple however more and more people are becoming self-employed in the UK or have income from multiple sources, so having complex income is becoming more frequent. People with complex incomes may have gaps in their earnings or need a lender to take a more holistic view of the risk they present in borrowing. All of these factors impact on the affordability calculations that lenders do to determine loan-to-income rations. Some lenders may still be willing to offer a mortgage but they may demand a larger deposit or charge a higher interest rate. Others may be willing to provide terms similar to those available to ‘everyone else’ provided a strong explanation and application has been submitted to them.

We work with a wide range of personal and financial circumstances and flexible income streams and have sourced mortgages for many individuals who have complex income. We guide you through the mortgage application process and source mortgage lenders that will be happy to agree a mortgage in principle with you. 

If you would like to arrange a call with one of our mortgage advisers then please get in touch.

*Please note: Your home maybe repossessed if you do not keep up repayments on your mortgage.

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