The Ipswich increases multiples for higher earners

Essex Home Finance
The Ipswich Building Society will now lend up to 5.5 times an individual’s income on mortgages where one applicant is earning over £75,000 a year.
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The Ipswich Building Society will now lend up to 5.5 times an individual’s income on mortgages where one applicant is earning over £75,000 a year.

Previously the income multiple sat at a maximum of 4.5 times the applicant’s income.

The mutual is not limiting its maximum income multiples to professionals, such as doctors, lawyers, accountants, architects and vets, as its manual underwriting approach allows it to assess each application individually and therefore underwriters can take a view on the applicant’s ability to maintain their income levels in the future.

The change comes as part of wider improvements to the Society’s affordability assessments, including:

  • the ability to exclude non-dependants in the household for the purposes of affordability;
  • increasing the regular shift pay allowance from 50% to 100% for selected applicants;
  • allowing the use of 100% of buy-to-let rental profits;
  • and accepting income from retired company directors who continue to receive an income from the business

Richard Norrington (pictured), CEO of Ipswich Building Society said: “We’re really pleased to get 2021 off to a positive start by enhancing our income multiples for high earners. We feel this is an important step given the recent upwards movements in house prices and predictions of further growth this year.

“Whilst it’s likely that many higher multiple applicants will be professionals, it’s important to us to be inclusive and that’s why we’ve taken the step to allow anyone with a higher income to apply, so that we don’t exclude individuals who have made a financial success of their career in other fields or industries.”

Original Article from Best Advice 13/01/2021

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