First-time buyer with variable weekly income secures mortgage

First-time buyer with variable weekly income secures mortgage

20.06.17 | Written by: Erin Gallacher

We were approached by a plumber looking to purchase his first home with a deposit of 15%.

The property in question is a three-bed semi-detached house in Greater Manchester.

As the client had only ever lived at home with his parents, he was unsure of what his day to day living expenses would be, so had asked for a 40 year mortgage term to keep monthly payments to a minimum.

There were three main challenges with this case:

  1. Failure to meet affordability calculations
    Although the client had sufficient income to support his mortgage, he could only meet the required affordability criteria by including his overtime in the calculation
    .
  2. Current employment for less than six months
    He had only been with his current employer for four months – most lenders like applicants to have been with an employer for six months’ so they can calculate an average income.

  3. Unclear payslips
    The client’s payslips did not provide a clear split between his regular working hours and his overtime compensation. Rather than display these separately, the client’s payslips merged both and displayed every hour of overtime worked as 1.5 hours. This created the false impression that the client was working unmanageable hours.

We took the case to one of the major building societies and explained the client’s payslips and income structure. The lender agreed to consider the case, providing we could obtain confirmation of the client’s regular working hours from his employer.

With this provided, the lender confirmed that the client represented a good risk and an offer was made.

The client received his new keys less than seven weeks after initial contact was made with Mortgages for Business.

Here are the details of the deal:

Property value: £162,500

Loan amount: £138,125

LTV: 85%

Rate: 2.14% 2 year fixed

Term: 40 years capital and interest

Mortgage payment:  £429 pcm

Lender arrangement fee: Nil

Consultant: Erin Gallacher, 01625 416392

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.