The clients: Our clients wanted to purchase a new residential property and needed a mortgage to enable them to do so. The first applicant is employed with half of his income made up of commission and bonuses, while the second applicant does not have a job. The clients also have two buy-to-let properties with mortgages in place.
The property: The clients were buying a four-bedroom detached house in Sussex for £1.15m. They had a decent deposit so needed to borrow £724,000.
The finance: The clients required borrowing of £724,000 and a lender who was willing to accept that half the income of one of the applicants was made up of commission and bonuses. The clients also wanted a mortgage term of 29 years, taking them up to their 75th birthdays.
Key requirements:-
- A lender comfortable with one applicant receiving variable income from bonuses and commission.
- A 29-year term, taking the clients up to age 75.
- A residential lender offering 62 per cent loan-to-value on a high purchase price of £1.15m.
- The ability to add the lender arrangement fee to the loan.
- A lender who would acknowledge the clients’ existing two buy-to-let properties as self-funding, thereby not considering the buy-to-let repayments as a commitment when calculating affordability.
After sourcing the whole mortgage market, we identified a competitive deal enabling the clients to borrow the full £724,000 on a repayment basis. We liaised with the clients’ existing lender and agreed to port their current mortgage over to the new property with the additional borrowing on a new product. The lender was also prepared to accept a 29-year term as the first applicant did office-based work so it was reasonable to expect him to be able to continue working beyond ‘normal’ retirement age. Even better, we were able to secure a residential mortgage on a market-leading two-year fixed rate.
As a bonus, the lender offered a free valuation and the ability to add the arrangement fees to the loan.
These features and benefits really appealed to our clients and we were able to submit a decision in principle and get approval from the lender before submitting the full application.
The application process: To support the mortgage application, the client supplied us with proof of identity, address and evidence of income together with the history of commission and bonus payments. We were delighted to inform our clients that the lender had issued a formal mortgage offer for the full amount requested.
Property value: £1.15m
Loan amount: £724,000
LTV: 62%
Rate: 1.5% on the porting product and 1.72% 2-year fixed rate on the additional borrowing
Term: 29 years
Lender facility fee: £995 added to the loan
Monthly payment: £2,582
