Day-Rate Contractor with Relatively New Contract Buying a Home

Our client, a day-rate contractor, was only two months into his current contract yet wanted to buy a new home. Before taking on this contract, he had taken a forced four-month break from work because of the pandemic.

To make matters more complicated, the client had several buy to let properties in the background and was himself renting. He needed to borrow 75 per cent loan-to-value (LTV) to purchase his new home, with the deposit funded by family members, and wanted to add any lender arrangement fee to the mortgage.

Numerous lenders were sourced but this was a complex case owing to the length of time he has been on his current contract, the four-month break due to Covid, the family-funded deposit, and the buy-to-lets in the background.

Key requirements: –

• A lender happy to lend to a day-rate contractor two months into their current contract and with a four-month gap in earnings before that. • A lender prepared to accept a gifted deposit. • A lender offering a mortgage term up to the age of 75 as the client intends to work until then and for the mortgage repayments to be affordable. • A lender prepared to add the arrangement fee to the mortgage.

After sourcing the mortgage market, we identified a lender who would agree to lend to a day-rate contractor and would agree to our client borrowing the required amount of £297,249.

The application process: To support the mortgage application, the client provided evidence of his contract and identity. We were delighted to inform our client that the lender had issued a formal mortgage offer for the full amount requested.

• Property value: £395,000 • Loan amount: £297,249 • LTV: 75% • Rate: 2.67% fixed for two years • Lender product fee: £999 • Monthly payment: £1,490
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