Regardless of the income you actually earn, self-employed mortgages applicants can be tricky to navigate. Different lenders have notably different criteria, and the way you draw your salary can have a tangible effect on the borrowing you can secure.
As a result, many high net worth individuals (HNWIs) find themselves immensely frustrated when finding a mortgage – particularly when their aim is the purchase of a new home. But providing you know where to look, there’s almost always a solution to be found.
Whether you’re researching mortgages for self-employed applicants or simply want more information about arranging finance for UK residential property, our free guide, Mortgages for self-employed borrowers, can help you.
The client:
At first glance, this client’s case looked straightforward; she was a British national buying a home in London, valued at just over three quarters of a million pounds. While she was seeking this on an interest-only basis at quite a high loan to value (LTV), her income meant she would comfortably be able to service the loan.
Unfortunately, the lenders she had already approached didn’t see it this way – because she was a self-employed applicant who did not draw any dividends from her business. Having been declined by these other lenders, this client approached Articus Finance to see if we could help her arrange the mortgage she required.
The solution:
While mortgages for self-employed applicants be certainly be problematic, we have a wealth of experience in this area and knew exactly which lenders to approach.
We have an excellent relationship with a building society that has a high appetite for self-employed mortgage borrowers, meaning they are also extremely experienced in assessing a borrower’s affordability regardless of the way they draw income from their business.
This lender was able to look at the client’s operating profits before tax for the previous two years, and use this figure to calculate affordability. On this basis, they were happy to offer her the borrowing required on a two-year fixed rate of 2.04% at 80% loan to value (LTV). Of this, 75% would be interest-only, with the final 5% on repayment.
This solution was a fantastic result for the client, and a great example of how high-value mortgages for self-employed applicants can be achieved with the assistance of the Articus team.
