£1.52m home-buyer mortgage for couple with retained profits in their business
We were approached by a married couple who run a successful security services firm, wishing to borrow £1.52 million to purchase a new home in North East London. This amount represented 80% of the property's purchase price and there are not many lenders that will offer this level of loan to value on such an expensive property.
There were two other challenges for us to overcome, if we were to find a suitable mortgage for our clients:
- Despite a good level of earnings, the couple keep much of their income in the business as retained profits. So, to achieve the loan our clients needed, we had to find a lender that would base its affordability calculation on salary plus profits, rather than salary plus dividends which is more common amongst mortgage lenders.
- The husband has a large car finance loan in his personal name, although the monthly payments are made by the business. This meant that we needed a lender that underwrites applications manually, as a computer was unlikely to understand the intricacies of the couple's complex financial arrangements.
We identified a couple of banks which, we felt, could meet the clients' needs. The couple then selected one of them based on its competitive two year fixed rate.
We submitted an application on the couple's behalf with documents to explain their circumstances and support their case. We then worked with underwriters to ensure that they clearly understood our clients' complex financial arrangements and a formal mortgage offer was duly issued. Here are the details of the deal: