At Enness, we regularly work with clients who have the means to service a large loan, but are unable to borrow as much as they’d like to due to affordability criteria. Typically, lenders will offer up to 4.5 times your income, and stretching beyond this can be a challenge.
This is frustrating for clients who have the background wealth to comfortably make the payments of a £1million+ mortgage. I recently assisted a client who had built her own house and was looking to refinance the development finance loan she had taken out to do this. My client had been offered a loan of £900,000 but she was ideally looking to take out more like £1.25million.
However, her income (and her husband’s) was creating an issue. My client was a shareholder in the company she worked at, meaning many lenders were seeing her as self-employed. Meanwhile, her husband was self-employed and had been trading for four years with fluctuating figures, so we ideally needed to use his net profit and his most recent year’s figures to maximise their borrowing.
In total, they had a joint income of roughly £200,000. However, this would still only secure them borrowing in the region of £1million. She, therefore, approached me at Enness to see if I could find a lender who would be prepared to stretch their affordability criteria much further.
I looked at smaller building societies who would be prepared to take a flexible attitude and look at my client’s overall background wealth and profile. By providing a full background of their income and expenditure, I was able to negotiate with a lender for an interest-only loan of £1.25million, which was over six times their income. This was a fantastic result for these clients.