Complex Affordability Residential Purchase with Later Life Lending
The Client: A young professional sports instructor, recently turned self-employed, was looking to purchase a new home to allow her to move closer to her place of work.
The Property: A three-bedroom townhouse on a modern development. The property was still within its National House Building Council (NHBC) 10-year warranty and in an ideal location for the client’s commute.
First Challenge: While the client had a 20% deposit for the property, made up of savings and equity in her current flat, her income was not enough to satisfy lender income multiple calculations for the amount she still needed to borrow. So, we had to find an alternative way to make the lender comfortable that the required loan was affordable for her.
First Solution: Fortunately, the client’s parents were willing to help, so we suggested the option of a Joint Applicant, Sole Proprietor (JASP) mortgage. The JASP would use their income to support her application, and it meant that we could make an application based on their three incomes combined while keeping our client as the sole name on the property title deed. Seeing it as the most suitable option, they agreed.
Second Challenge: Whilst a JASP mortgage was a credible solution to the client’s problem, there are only a handful of lenders that offer them, restricting the options available to the client significantly. Additionally, the age of the client’s parents meant that we required a lender that would take applicants up to the age of 80 during the mortgage term, restricting our choices even further!
Final Solution: Having already identified lenders that offered JASP mortgages, we used our knowledge of the market and additional research to find those who would lend up to the age of 80. The shortlist left us with a minimal selection of lenders, at which point we looked more closely at the JASP mortgages on offer in order to find the most suitable rate for our client. Based on the strength of the three combined incomes and the 20% deposit, we were able to secure an excellent product for our client, allowing her to purchase her new home! Here are the details: