If you work in an industry where your income is variable, it can be challenging to secure a mortgage. A number of our clients come from the worlds of sport and performing arts where their income can change drastically from one year to the next. However, it’s far from impossible to secure lending. You just need a team like ours on your side to help source the right lending solution.
Case profile
One of our recent cases was a prime example, as our husband and wife clients worked in a creative industry. Their recent income levels had been low in recent years and any lender looking purely at this factor would not have been able to lend at the level they required. However, the clients were collaborating on a project which was projected to bring in substantial income.
The clients were remortgaging to repay an existing £900,000 mortgage on their main home and also wanted to raise £200,000 to replenish cash funds they had spent on home refurbishments. Many lenders will not consider lending to cover this latter purpose, so this proved a challenge alongside the source of their income being foreign currency and offshore limited companies, which can prove difficult for some banks to lend against.
Solution
Our Associate Director Nigel Bedford used his knowledge to present a compelling credit proposal to the small number of banks which might be able to consider this particularly challenging case.
By demonstrating the couple’s previous track record and progress on their creative project to date, the bank was sufficiently reassured that the anticipated earnings would be sufficient to fully or substantially repay the mortgage in two years, should they choose to do so.
| Loan amount: | £1,100,000 |
| Rate: | 2.50% fixed for 2 Years |
| Loan To Value: | 28% |
| APRC: | Overall cost for comparison 3.30% APRC representative variable |
| Term: | 2 Years |
| Type: | Interest only |
| Loan purpose: | Remortgage |
| Lenders arrangement fee: | 1.0% of loan amount |
| Early repayment charge: | 2% of the outstanding loan amount in Year 1, 1% in Year 2 |
Overall cost for comparison 3.30% APRC representative variable based on 8 quarterly payments at a fixed rate of 2.50%. Total amount to be repaid is £1,155,000.
Because this is an interest only loan, separate arrangements will need to be made to repay the original loan amount owed at the end of the mortgage term. The actual rate available will depend upon individual circumstances and may not be available to everyone. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
