The mainstream mortgage market is designed to cater for the majority of candidates and, unsurprisingly, that means most mortgages are based on a typical profile. Usually that’s an employed person with a straightforward financial history and simple portfolio such as a pension, ISA and perhaps some investments. However, we know that there are plenty of clients out there who don’t fit this profile and, in fact, the wealthier the client, often the more complex the situation.
This insight rings true when dealing with self-employed entrepreneurs, many of whom structure their income based on the success of their various enterprises. This can mean their income levels are lower than a bank would expect to see in comparison to the loan size being sought.
Our client was a classic example of this situation. They ran a Limited company but only drew down the salary they required to live, preferring to keep most of the capital in the business for tax and cash flow reasons. Therefore, when lenders assessed our client’s income against the required loan amount of £825,000, they wouldn’t have been able to grant the mortgage.
Our specialist adviser Paul Fredericks identified this issue and knew that a select number of lenders can offer self-employed individuals a mortgage based upon both salary and net company profit. An added complication came in the shape of a second residential property, the costs for which needed to be factored into affordability checks. Having scoured the market, Paul was able to secure a two-year fixed deal at an incredibly low rate, leaving our client delighted with the outcome.
If this situation is familiar and you’re struggling to secure the lending you need to complete your dream purchase, contact us for a free consultation, with no obligation to proceed. One of our expert advisers will be happy to assess the offerings available on the market and consider your best course of action.