CASE STUDIES
My Hero

In this section we are providing you of real life example scenarios where we have been able to assist our clients.

The names and some numbers have been changed where necessary for data protection purposes but the picture of the scenario remains true as a whole. You do need to consider that there may be other mitigating factors that have supported the client’s situations.

Customer Scenario

A single self-employed client wanting to purchase their first home, however, income in the latest year has been impacted by Covid.

Current Situation

Client has a healthy deposit, however, their latest years income has reduced due to the impact of Covid on their industry. Their previous years earnings were high but the income from 2 years ago was very low.

In order to borrow the required amount to facilitate the purchase the previous years income needs to be taken into consideration.

The Solution

With some lenders now taking a more bespoke view on self-employed applicants that have been impacted by Covid, we were able to source a lender that was able to consider the clients previous years income.

Ordinarily some lenders would then average the years income with the income from 2 years ago, which would not have been sufficient, however, we sourced a lender that would utilise the previous years income in isolation when assessing affordability. This was made possible by strong recent earnings and clear evidence via business bank statements that income was back up at pre-covid levels which the underwriter was satisfied with.

This bespoke approach did mean taking a slightly higher interest rate, however, enabled the applicant to borrow over £60,000 more than with any other lender and did mean that they were able to secure the home they had their heart set on.

Customer Scenario

Self Employed Company Director/Business owner looking for a mortgage after being affected by COVID.

Current Situation

The client was looking to remortgage their home and find a new deal after lockdown. Business levels had picked up again after lockdown; however it was clear that the total business income and profit for the year was not going to be the same as previous years, as the business hadn't been operating for a period of 6 months.

The Solution

Although the company accounts for the business showed a drop in turnover and associated business profits, the customer had continued to draw the same income in salary and dividends from the business, as there was a reasonable amount of retained/built up profit held within the company.

Even though business levels were not the same over that year, the client had still drawn the same income that year for tax purposes and tax returns confirmed this. We found a lender that was able to assess the income based on just the tax returns, along with evidence of 3 months bank statements showing income that had returned to levels pre-COVID. The bank was satisfied that the business has successfully been able to resume operations and can see that income is consistent and sustainable moving forward.

Customer Scenario

A self-employed contracting married couple working in the TV/Film industry was looking to purchase a new home but hadn't been working due to a combination of COVID and maternity leave.

Current Situation

The customers had been turned away by other advisers as they were unable to work during the COVID period and therefore didn't have 12 months continuous contracting records. Pre-COVID, the customer had history in the industry for over 5 years, so were well established. They were ready to buy, with a 20% deposit, whilst also both having returned to work that month.

The Solution

Several lenders were still working from Pre-COVID policy and hadn't adjusted their lending criteria to account for the pandemic, so we needed to carry out a thorough search of bespoke specialist lenders.

We found a lender that would usually require 12 months prior contractor history but we had negotiated that the clients' track history in the industry and the established network would ensure the sustainability of earnings into the future. We were able to justify the affordability of the mortgage based on the new current contracts, previous contracts from before COVID, CV's and previous accounting information to build a case for the customers.

The lender was satisfied that the clients' history of earnings over an extended period of time could easily be replicated after the pandemic and that the maternity break would have prevented them from earning. The bank offered a mortgage of £290,000 on a 2.92% 5 year fixed rate and the customers have bought a new home for their growing family!

Customer Scenario

A young couple in their twenties were looking to buy a new home as they just had a young baby and wanted to move out of their parents.

Current Situation

The customers had a 10% deposit and needed to secure the largest loan possible to obtain a property in the area close to their parents. Both customers were doing as much as possible to boost their earnings and provide for the family. Mr was earning a lot of overtime at work and trying to maximise his additional monthly commissions, while Mrs was working in a school and had taken on an extra role as an administrative assistant at the weekend. Ultimately they needed a large loan which would be in excess of 5x their total annual income. The customers had been turned away by other advisers, as they had been told the maximum borrowing with a 10% deposit would be 4.49x their annual income, and wouldn't include the commission or the additional weekend work.

The Solution

The customers could demonstrate they had been earning in this format for an extended period of time. Mr had evidence of commissions and overtime extending back over 3 years and Mrs had been earning from both jobs for over 2 years also.

Although typically speaking, most lenders are only offering 4.49x your total annual earnings, some can lend more. However, with a smaller deposit, this can be difficult. Also using variable earnings like commission and overtime is normally capped at 50% of that income, to allow for fluctuations.

As first time buyers, a lender was offering a new scheme to support those with a smaller deposit. We were able to secure a loan up to 5.5x their combined incomes. The bank was happy to use 100% of commission and overtime, subject to the lowest of the last 3 months. They were also happy to use the 2nd job as sustainable income, as that had been established for over 12 months.

The bank agreed to lend £330,000 with earnings of £62,800 - this was 5.25x income at 90% LTV (10% Deposit). We secured a very reasonable 2.44% 5 year fixed rate.

Customer Scenario

A single self-employed client wanting to purchase their first home, however, income in the latest year has been impacted by Covid.

Current Situation

Client has a healthy deposit, however, their latest years income has reduced due to the impact of Covid on their industry. Their previous years earnings were high but the income from 2 years ago was very low.

In order to borrow the required amount to facilitate the purchase the previous years income needs to be taken into consideration.

The Solution

With some lenders now taking a more bespoke view on self-employed applicants that have been impacted by Covid, we were able to source a lender that was able to consider the clients previous years income.

Ordinarily, some lenders would then average the years income with the income from 2 years ago, which would not have been sufficient, however, we sourced a lender that would utilise the previous years income in isolation when assessing affordability. This was made possible by strong recent earnings and clear evidence via business bank statements that income was back up at pre-covid levels which the underwriter was satisfied with.

This bespoke approach did mean taking a slightly higher interest rate, however, enabled the applicant to borrow over £60,000 more than with any other lender and did mean that they were able to secure the home they had their heart set on.

Customer Scenario

Our buyer is a HNW UK citizen currently living and working in the Pharmaceutical industry in Los Angeles.

He owns a residential property in Los Angeles and a further residential property here in the UK.

With his parents needing a suitable place to live, he wished to purchase a further residential property for them to reside here in the UK. The property he wished to purchase was at a value of £680,000 of which he wanted on a purely interest-only basis.

The Solution

Most High Street lenders will not lend to a borrower overseas or one who is not paid in sterling. So our pool of choice was limited without heading down a specialist lending route where rates are far less favourable.

We then approached a High Street lender with whom he shared an existing banking relationship with, we were able to secure an interest-only product and allow him to purchase essentially a 3rd residential property for his parents on full interest-only using his investments and savings as a repayment strategy for the full amount

Outcome

Achieved : 75% at a very acceptable 1.43% on Interest only 3 year fixed rate.

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