Our client – an accountant who owns 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). Perhaps not surprisingly, once he had his offer accepted on the property, he visited his own bank to arrange the mortgage.
Five weeks later his bank was still considering his application and the vendor of the property was getting nervous. At this point, the vendor’s estate agents Jackson-Stops stepped in and referred him to Private Finance to get the transaction back on track.
The issue that had stopped our client’s own bank from lending to him was the fact that he has a number of sources of income, including money paid into his company by the overseas parent company. His accounts are more complicated than an employee paid on a PAYE basis but this actually means he has 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.