Our client is a contractor working in the city, paid a daily rate. It can be tricky for contractors to obtain the mortgages they need as not all lenders will take a day rate into account when deciding what the applicant can afford to borrow. We required a lender which would accept a fixed-term contract using the client’s daily rate, enabling it to offer a high LTV so that she could release equity for the above reasons.
Numerous lenders were sourced but the high LTV required made it tricky to get the affordability calculation to fit.
Key requirements: – A lender comfortable with basing the mortgage on the client’s fixed-term contract.
A lender also comfortable with remortgaging to release enough equity for the applicant to buy out her ex-partner’s share of the property.
Borrowing at 90% LTV.
After sourcing the mortgage market, we identified a lender who would agree to our client remortgaging at 90% LTV to enable her to release equity to buy out her ex-partner, basing affordability on her fixed-term contract.
The application process: To support the mortgage application, the client supplied us with evidence of her fixed-term contract and income, as well as proof of identity. We were delighted to inform our client that the lender had issued a formal mortgage offer for the full amount requested.
Property value: £360,000
Loan amount: £324,000
Rate: 1.88% fixed for two years
Lender product fee: £995
Monthly payment: £1,210.31