If you’ve changed roles or set up a new business venture in recent years, you will know that it can cause issues with some mortgage providers, who generally need to see proof of income stretching back around three years. What can you do if you don’t have this information, and therefore you need a lender to take a view on your current and future earnings?
Having worked with us earlier this year on a bridging loan, our clients were once again faced with the prospect of losing their property, either by a forced or voluntary sale. The terms of their bridging loan were coming to an end, but their situation remained complex. As entrepreneurs with a relatively new venture, they only had just over a year’s worth of accounts. Therefore they needed to work with a lender who would look at the forecasted figures for the business, as well as net profit before tax as their income didn’t quite meet the requirements for their loan size. Coming out of a bridging loan, they wanted the security of a fixed term, interest only mortgage on the lowest possible rate.
Our Senior Mortgage Associate Aimee Hadley sourced a lender who would base their decision on the business’s net profit and the forecasted figures of the venture. Once these had been averaged, they were comfortable that our client would be able to cover the cost of the borrowing. They also took a view on the client’s credit history, which had shown up a small number of missed credit card payments.
Your home or property may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.
The Financial Conduct Authority does not regulate some aspects of bridging finance.