Arranging finance as a self-employed individual is far from easy, even for those who are more than able to service a large loan.
The secret to success lies in having the right industry contacts, and a knowledge of which lenders are able to maximise the borrowing from your particular income streams – be that share of profits, dividends, a salary, or directors’ loans. A specialist mortgage broker can therefore be invaluable, as this case study illustrates.
Are you a self-employed individual seeking high-value UK property finance? Our brokers would be happy to advise. And in the meantime, why not download our free guide, Mortgages for self-employed borrowers.
The client:
Our client was a self-employed UK national. He owned both a residential property and a buy-to-let investment, and was looking to move to his next home. The property in question was a beautiful three-bed in London, valued at just over three quarters of a million pound.
Unfortunately, this client was struggling to secure a mortgage for several reasons. Despite having healthy levels of profit, he left much of his wealth within the business, meaning mainstream lenders struggled to calculate his affordability favourably.
Compounding this challenge, he was also seeking a high loan to value (LTV) mortgage on an interest-only basis – both of which can be tricky without any other factors at play. The client therefore approached us to see if we could find a solution among our large panel of lenders.
The solution:
We work with a niche building society that has a high appetite for lending to self-employed borrowers. We felt they would be able to take a holistic view of this case, and after outlining our client’s background carefully, we were pleased to find a resolution.
This lender was able to take our client’s healthy operating profits into account, and we negotiated for an 80% LTV mortgage on a 2-year fixed rate as a result. The vast majority of this would be on an interest-only repayment basis, with a small fraction as capital repayment.
Overall, this was an excellent outcome for this client – and a clear illustration of the fact that self-employed applicants can find success in the UK mortgage market, providing they work with a broker who has the right relationships.
The case in brief:
- Self-employed British national
- Buying high-value residential property in London
- Primarily interest-only mortgage at 80% LTV
- Placed with a lender with high appetite for self-employed clients