Restrictions on bonus lending don’t have to scupper your mortgage

Restrictions on bonus lending

Coronavirus has meant seismic change for most of us, and the mortgage market is no different. Although our team has been busier than ever with specialist cases, lenders have, unsurprisingly, exercised caution as they have sought to protect their own institutions and lend responsibly in an incredibly uncertain environment.

Lending based on salary bonuses was one of the first casualties of the pandemic, as revealed by our very own Nigel Bedford  in the FT last year. For many of our HNW clients, this has been a blow as it’s a common income structure for many. However, all is certainly not lost when you have our team on your side, as evidenced by our latest case study.

Case profile

Our clients had been renting a country property for several years, but felt it was time to invest in their own rural pad, priced at £800,000. Our client was the department Managing Director of a London financial institution and, as such, their income was largely bonus-based. Despite several years’ history of strong bonus income and the business performing well during lockdown, most lenders deemed the bonus income to be unreliable, and our client was drawing a blank with their mortgage.

Solution

Our team found a lender which was willing to consider bonus-related income, backed up by the client’s strong individual performance and that of their employer. The lender offered an 85% LTV, accounting for the client’s full income, including bonuses. The team also secured a market-busting interest rate fixed for five years, resulting in an extremely satisfied client.

If you’re struggling to secure a mortgage based on bonus income or performance-related pay, don’t hesitate to get in touch with our team, who will be happy to discuss your situation and give their expert thoughts on next steps with no obligation to proceed.  

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