- Purchase of a new family home
- Loan amount – £550,000
- Annual contractor income
- Latest years accounts for self employed income
What was the situation?
Our client was in the midst of a divorce and required a new family home where she could bring up her 2 young children. She was having trouble raising the required mortgage and had a tight deadline.
What is the issue?
The client was self-employed looking for a mortgage. She was earning income from an annual contract which had varying rates according to the work available.
Furthermore, the client had a limited track record of income at the level required for this mortgage as she had been on maternity leave in the previous years, lowering her historic earnings.
Advias did a phenomenal job allowing me to borrow much more than any other mortgage adviser had said was possible. Thank you! I couldn’t be happier.
The client’s income stream was complex:
- Previous years’ accounts showed income at half the level we required and that which was evidenced in the contract
- Contractor mortgages are usually based on a day rate which is then multiplied to work out the annual income – This contract set out an annual figure plus Adhoc earnings for certain additional projects
We presented 18 months of invoices to the lender’s underwriter so they could fully appreciate the relationship and sustainability of the client’s income and their contract.
The lender was able to make their affordability assessment with the use of the income evidenced in the last 12 months worth of invoices to appreciate the current annual income, rather than relying on the historic tax returns which would have shown half the income required.
We secured an interest-only, fixed-rate mortgage to ensure the client’s monthly mortgage payments were stable and affordable at a time when the client was enduring significant changes in her personal life.
Contractor mortgages are a specialist subject, when reviewing your options it is important to engage with an experienced mortgage broker for contractors.