The Client: A single parent who works full-time in the construction industry. She approached us at the beginning of November 2017 looking for help in getting a mortgage to buy her home which she has been renting since 2012.
She is also the joint owner of a currently un-tenanted rental property with her former partner. The situation with him is troubled and as a consequence, there are three missed payments on the buy to let mortgage in the last 12 months.
Aside from this, her credit record is good.
The Property: A 4-bed semi-detached house in Greater Manchester.
The Finance: The client has a deposit of £60,000 made up of savings and a gift from her parents. She was looking to borrow £200,000 which equates to just less than 4.5 times her income – well within the standard affordability requirements of most lenders. She also wanted to be able to add the lender arrangement fees to the mortgage so that she didn’t have to pay them up front.
The client was keen to get a five-year fixed rate to help her manage her monthly budget and protect her from any rate rises in the near future.
The Solution: Apart from the missed mortgage payments on the rental property, the client’s circumstances and borrowing requirements were fairly standard, which meant that we needed to find a lender that would take a practical approach when assessing the mortgage application.
We chose the intermediary arm of a high street bank where we have a strong relationship with the business development manager. Before submitting an application, we chatted the scenario through with the manager who agreed that the bank would probably lend as long as the supporting documentation confirmed the circumstances.
We then worked with the client to collate all the necessary paperwork and submitted the application early in the new year.
The underwriters confirmed the client’s situation and a formal mortgage offer was duly produced just two weeks later.
The process from initial enquiry to completion took a little longer than usual because of the extra work involved but the client was happy with the overall outcome. She is now the proud owner of her own home. Here are the details of the borrowing:
Property value: £260,000
Loan amount: £200,000
LTV: 77% (including lender arrangement fee)
Rate: 5 year fixed at 2.42%
Term: 28 years capital & interest repayment
Mortgage payment: £824 pcm
Lender arrangement fee: £995 added to the loan
Consultant: Erin Gallacher, 01625 416392
13th March 2018