£850k Self Employed Mortgage for a New LLP Partner

What was the situation?

Our client had recently been promoted to partner at a leading professional services firm. The appointment moved him from a salaried position to self-employed status as a member of the firm’s limited liability partnership and brought a considerable increase in income.

He was making a joint purchase of a £1.5m family home in Hampshire. Through his firm’s corporate employee benefits scheme, he approached LDN Finance for advice.

What was the issue?

Lenders often ask for two years of accounts when assessing a self-employed mortgage application. As a newly appointed partner, our client did not yet have that history of partnership earnings, although his income was strong and clearly documented. Some partners are unaware of the income evidence lenders may require until they apply.

An £850,000 mortgage would therefore need to be assessed on partnership income alone, without the accounts lenders would normally rely on. The case needed a lender prepared to assess earnings on their current strength and documentation robust enough to give its underwriters confidence from the outset.

What was the process?

Martin Ball, Mortgage Adviser, Private Clients, saw that the case turned on evidence rather than affordability: the earnings were sound, and the task was to present them in a form an underwriter could rely on.

Lender approaches to newly appointed partners vary considerably, from those requiring a full year of accounts to those prepared to lend on confirmation from the firm. Drawing on LDN Finance’s lender relationships, Martin identified which lenders would accept that confirmation and what each would expect it to include. Our client’s promotion within the same firm added further weight, showing an established relationship with the business through his change in status.

In place of accounts, Martin specified a letter from the firm confirming our client’s appointment, drawings, profit distribution and projected earnings, giving the lender a clear view of current and future income. With LDN Finance already working alongside the firm through its employee benefits scheme, he obtained the letter directly, so the income was evidenced in full before the application was submitted.

Martin structured the borrowing as an interest-only mortgage to keep our client’s monthly payments lower, at 57% LTV over 25 years, with the rate secured for two years. Working closely with the lender’s BDM, he then positioned our client as a high earner with confirmed income, and the case was assessed on that basis.

Our Solution

On the strength of the evidence Martin had assembled, the lender accepted the full partnership income and issued a mortgage offer promptly. Our client went on to complete his £1.5m purchase and was very pleased with the outcome.

For employers, the case shows what a mortgage benefit offers at the point of promotion: direct access to an adviser like Martin, who understands how lenders assess partnership income and has the relationships to act on it. It also reflects LDN Finance’s experience arranging high-value lending for professionals whose earnings have moved ahead of their paperwork.

LDN Finance works with employers to offer mortgage and protection advice to their people as an employee benefit. If you are an employer interested in partnering with us, please get in touch.

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