The case studies below show what a huge difference can be made by an independent adviser looking at different lenders lending policies:
Employed Earning £30,000 per annum
Mr G was looking to obtain as big a mortgage as possible based on his salary of £30,000.
- Lender one would lend £108,000
- Lender two would lend £120,000
- Lender three would lend £150,000
First Time Buyer
Miss H was a first time buyer with an income of £20,000. She was looking to buy her first home for £140,000 with a 15% deposit
- Majority of lenders – £90,000
- Lender two – £119,000 mortgage obtained
- In this case we managed to utilise Miss H’s Father who was willing to act as guarantor. Miss H could borrow £90,000 in her own right and her Father guaranteed the difference of £29,000.
Self Employed – Own Limited Company
Mr C was self employed and was 100% shareholder in his own Ltd Company. He paid himself a basic salary of £6,000 per annum but did not take any dividends in the most recent year. The company made a profit of £50,000.
- Lender one – would lend £15,000
- Lender two – would lend £225,000
- This is because the vast majority of lenders will lend purely based on salary and dividends rather than looking at the profit of the company. There are a few however that will look at the profit when assessing lending, which is how we obtained the lending required.
Couple with children
Mr & Mrs Y have a joint income of £50,000 but have 4 children.
- Lender one would lend £168,000
- Lender two would lend £225,000
- This is because with some lenders reduce the amount you can borrow depending on the number of children that you have. Others ignore dependents when assessing affordability.
Employed but with a rental property
Mr A earned £100,000 per annum and was looking for a mortgage of £480,000. He has one rental property, which was making a profit of £750 per month.
- Lender one – £115,000
- Lender two – £480,000
- The difference here was that lender one applied a certain calculation to the clients rental property, which greatly affected his affordability. Lender two simply ignored the let property.
Commission / Overtime/Bonus
Mr G earned a basic salary of £28,000 but another £20,000 in overtime. He was looking for a mortgage of £215,000.
- Lender one would lend £171,000
- Lender two would lend £216,000
- This is because most lenders will only use 50% of any overtime, bonus or commission when assessing the loan required. Others will use 100% of the additional monies.
These are a small number of examples of how we have helped our clients obtain the lending they needed.
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