Clients wanted a new home mortgage, plus a residential remortgage on their existing property.

Needed a lender to assess affordability via company net profit.

High Street mortgage rates obtained despite seeming credit challenges.

Our client

Our clients, a husband and wife, were referred to Rose Capital because they wanted to buy a new residential property and keep their existing property as a second residence.

What was needed?

The clients needed to remortgage their existing home to raise capital for the deposit for the new property, and arrange a residential mortgage for the purchase of their new home, rather than switch to a Buy to Let mortgage, as both properties would be their residences.

What was the challenge?

The husband of the couple was self-employed with a Limited Company and although his company had a healthy track record of net profit, he didn’t draw a large salary or dividends. This meant that a lender needed to be found who would be willing to consider the company’s net profits for affordability purposes rather than the client’s salary or dividends. This narrowed the field of appropriate lenders considerably.

In addition, once the application was submitted and credit searches completed it appeared that the clients had adverse credit defaults. If this proved to be the case the mortgages would need to be placed with a sub-prime lender which attracts a significantly higher mortgage interest rate.

How we provided the solution

Nick Plappert, Executive Director, on being referred the case, was concerned that the complex circumstances around this matter would place it outside the remit of any High Street lender, or worst case, he’d be unable to place the case with any lender.

After extensive research and consultation with several banks Nick identified a High Street lender who would be willing to consider net profit, as opposed to salary and dividends, for a Company Director when assessing affordability.

In addition, on learning more about the client’s credit issues, Nick was able talk to the lender and provide a full explanation and documentation showing the defaults were errors or minor disputes.

As a result, Nick was able to arrange an 80% residential mortgage of £572,000 on the purchase of the new property and an 80% remortgage of £584,000 on the clients’ existing property. This enabled the clients to buy their new property while retaining their existing one, financed at a very competitive High Street rate on both the residential mortgage and remortgage.

The clients were overjoyed that they were able to achieve their mortgage goals to buy their new home and retain their existing one, and finance it at High Street lender mortgage rates.

What was the rate?

The rate was 1.32% fixed for 2 years on both the residential mortgage and remortgage.