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I am employed as a software engineer in a company that grants shares and a sign on bonus. Do mortgage lenders in the UK take into consideration stock grants and annual sign on bonus (sign on bonus but given over 2 years for example) when lending? If yes, are they high street lenders or private brokers?

  • Not really what I mean is a sign on bonus but given over 2 years for example. – Samer Tufail Feb 10 at 21:51
  • OK Thanks for the clarification. – D Stanley Feb 10 at 21:53
  • No problem maybe I should add it part of the question. – Samer Tufail Feb 10 at 21:55
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    If you're relying on a sign-on bonus that lasts 2 years to gain finance a mortgage that lasts 20 to 30 years, then you may be over-stretching your finances. – Simon B Feb 11 at 0:09
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    Ultimately, this is a question you need to ask your lender. Anecdotally, I've found that lenders tend to be very conservative and risk-averse, so may take nothing more than your salary as evidence of income. They're interested in your regular, contractual, monthly income. Annual or one-off discretionary awards tend not to count. – Steve Melnikoff Feb 11 at 9:05
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In short, no.

Anything that sits within volatile income (of which sign on bonuses, golden parachutes, stock grants, annual bonuses etc etc all most definitely are), lenders tend to discount because what they care about is your ability to make stable payments for long periods - none of which is impacted much by methods of bonus like this (if anything - it can often be a sign of instability, showing people jumping jobs often, working for risky, start up style companies with a high risk of failure or other higher risk employment actions etc).

If you get a large number of these types of payments you're generally better off aggressively saving the ones you get now and add to the initial deposit (to reduce your interest and payments later), and to be mindful of mortgage products that allow early payments so when you get them later you can aggressively pay down your mortgage.

If you want to have your cake and eat it and factor in all these volatile payments as the same as income, then sadly lenders have far too long a track record of these types of people blowing up and typically won't go near it.

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