Remortgage for self-employed client with complex income structure

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Are you self-employed and need a large remortgage? We have the banking contacts to provide a tailored solution where other lenders may not be able to help. To discuss this or any other large or complex mortgage case, please contact us on 020 7519 4984 or email us.

Case Profile

The clients were looking to remortgage their main residence. However, the fact that they were self-employed and that their income structure was complex, made arranging a remortgage a challenge.

The clients wished to borrow £250,000 against a property valued at £600,000. They wanted to replace their previous high street mortgage, with a new mortgage on an interest only basis.

The clients are in their 60s, self-employed and are paid in the form of a director’s loan. This is income which an individual receives from their company. It is not a salary, but money which they have previously paid into or loaned to the company. This created a challenge, as lenders generally do not accept this form of income. As a result the clients could not meet most lenders affordability criteria.

Solution

The clients approached us to assist them in sourcing a mortgage that suited their needs. We took the time to fully review their circumstances, and using our experience and expertise in dealing with complex cases we were able to find them a solution.

When approaching the lender, we presented the clients unused pension pot as a repayment vehicle for the mortgage, as an alternative to the director’s loans repayments. Between the clients they had a total pension exceeding £1 million, and would receive a guaranteed amount of £74,000 a year between them, for the rest of their lives.

We provided the lender with copies of the pension payments. This was enough proof for the lender that the clients had the funds available if they were needed, although they did not require it to be drawn. The lender could, therefore, base affordability on the unused pensions rather than the self-employed director’s loan. This suited the clients perfectly.

The clients were happy with the mortgage terms presented, and were able to secure funding to remortgage their home.

Deal Highlights

Loan amount:£250,000
Rate:3.45%
LTV:41%
APR:Overall cost for comparison 4.6% APR representative variable
Term:10 years
Type:Interest Only
Loan purpose:Remortgage
Lender’s arrangement fee:0.75% of the loan amount
Early repayment charges:3% of the remaining balance during the first 2 years

Notes

This case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.

Please note that this specific deal may not be available to – or suitable for – all customers, dependent on their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This document may not contain all the information needed for customers to make a decision and they should seek advice.

Overall cost for comparison 4.6%APR representative variable based on 10 years at 3.45%. Lender’s arrangement fees of 0.75% of the loan amount. The actual rate available will depend on your circumstances. Ask for a personalised illustration.

largemortgageloans.com is a trading name of largemortgageloans.com Ltd. A fee of up to 1.17% of the mortgage amount is payable, of this 25% is payable on application and the remainder on completion, e.g. on a mortgage of £1,000,000 the fee would be £11,700 of which £2,925 would be payable on application. The precise amount will depend on your circumstances.

Your home or property may be repossessed if you do not keep up the repayments on your mortgage. Changes in the exchange rate may increase the sterling equivalent of your debt.

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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

largemortgageloans.com is a trading name of Largemortgageloans.com Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: www.fca.org.uk.  The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending.  

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