Our client – an accountant who owned a professional services business jointly with an overseas parent company – wanted to purchase a property in Kent for £795,000 using a 25% deposit. He needed a loan of around £595,000 (75% loan-to-value ratio), so approached his bank with the hopes of securing a mortgage.
Five weeks after the application had been submitted, the bank had still not made a decision and the property's vendor was getting nervous. At this point, the vendor’s estate agents, Jackson-Stops, stepped in and referred our client to us.
The issue that had stopped our client’s own bank from lending to him was the fact that he had a number of sources of income, including money paid into his company by the overseas parent company. His accounts were more complicated than an employee paid on a PAYE basis but this actually meant that he had more disposable income with which to service his mortgage. Unfortunately, many high street banks are either unable or unwilling to spend time understanding self-employed or entrepreneurial applicants who have several sources of income which cannot be proved by simple payslips and P60s.
Our client needed a bespoke mortgage solution; he just didn’t realise it until his bank let him down. We found a private bank who – after two meetings where one of our experienced professional mortgage brokers presented our client’s case to the bank’s underwriting team – understood the tax efficient way in which our client had been advised by his accountant to receive his income. They took the decision that our client could service the £595,000 loan based on his accounts and financial records.
This meant that our client did not have to drop out of the purchase transaction and lose his desired property.
A £595,000 discounted variable rate mortgage, based on a £795,000 valuation, was negotiated at a rate in line with some of the best available in the market.
The client was extremely happy with this outcome and relieved that he had been introduced to Private Finance when his own bank failed to deliver. In a further development, having lost confidence in his own high street bank, he also moved all of his banking requirements to the private bank.