When working with self-employed entrepreneurs, we understand that fluctuations in income are commonplace due to a variety of factors. Sometimes it is purely due to market forces, other times it is part of an investment strategy and in some scenarios, it can be a case of a business ‘taking off’. When that happens, lenders can sometimes be cautious about basing a mortgage on current lending capabilities, preferring instead to average out the last two or three years’ income and offer a mortgage based on that amount. However, as we work with ambitious clients, that often does not fit their vision and it’s our job to secure them a mortgage which will help them grow into the future.
Case profile
Our client was selling their London home for £1.6m to buy another priced at £2.9m. With a 25% deposit, they were looking for an interest-only mortgage based on a repayment vehicle of future earnings. As a young and successful Professional, our client had become very well-known in their field and, as such, had seen a rapid rise in income over recent years. Therefore, although their current income would comfortably cover the loan amount, when based on their two or three year average income, it would fall short of the lender requirements.
Solution
Our team sourced a specialist large loan underwriter who understands professional income and its potential to rise consistently. The underwriter looked at more than just the basic accounting paperwork and gained a full understanding of our client’s business model. Working with this specialist, we secured a 70% interest only mortgage. Separately, we also organised a 5% second charge loan based on a long-term repayment plan which had no overpayment restrictions, allowing the client to pay it off quickly with surplus earnings.
If you’re looking for a mortgage adviser which understands complex or fluctuating income strictures, we are the team to help. Get in touch to find out more about how we can use our network of private, high street and challenger banks to help you find the right solution, based on your individual circumstances.
