Purchase and remortgage for separating couple

What was the situation?

I was approached by two of my clients – a couple – however, they were in the process of separating. Whilst they owned a house together on the Dorset Coast, one was keen to buy the other out and purchase a new £1.2 million property in London ready for a new start.

One of the couple had already begun the process of remortgaging with an alternative broker, who was unfortunately unable to fulfil the enquiry due to some complexities. At that point, they came to me, and I explained that I would be happy to help them.

Both needed help from me, one for the remortgage and the other for their new purchase.

What was the issue?

It was agreed that the person purchasing a new property needed £150,000 for the purchase of their new London home. The other person remaining in the house needed almost £300,000 with an additional £120,000 for the buyout. By combining these figures, they required a large income stretch – almost 6x their income – which presented a challenge for some lenders.

Additionally, one of the applicants was self-employed; set up as a sole trader for many years before becoming a limited company director a year before meeting me. In terms of lender affordability this meant that, despite having had a successful income for many years whilst self-employed, the fact that they had one year’s trading accounts for their limited company caused several lenders to feel uneasy.

Due to their complex income stream, unfortunately they were declined in the final minute of their original application prior to meeting me, meaning this impacted the London purchase also. They say everything happens for a reason and whilst this was a blow to the onward purchase, the silver lining meant that the coastal property had gone up in value benefiting the person remaining in the property.

What was the process?

Due to having 1 year’s trading accounts, I needed to find a flexible lender who would adapt their criteria and take a common-sense approach to lending to this borrower. I could demonstrate successful income earning from when they were a sole trader, I just needed work with the underwriters and key decision makers to show them that they were a reliable borrower who could afford the loan, despite having one year’s trading accounts.

What was the solution?

For both applications, the lender took a view outside of policy resulting in the desired income stretch. I conducted thorough investigation to show a clear understanding of the client’s financial situation and knew early on that I needed to look at the case for all its merits to ensure the lender felt comfortable.

The lender looked at the value of the case holistically and found confidence in the reliability of the person’s previous credit history whilst self-employed. As there was no indication on file to suggest that payments would not be made, the lender found confidence in the sustainability of the clients continued self employment.

As a result, I secured a 3yr discount mortgage at just over 3%. For the purchase, I was able to secure a 3 year fixed rate at just over 2%.

Without our excellent relationship with the lender, we would not have been able to speak to the underwriter and decision maker to overcome obstacles and get case over line.

Lending solutions with LDN Finance

We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates. 

Get in touch with us to organise an initial consultation.