Two self-employed medical professionals wanted to purchase a £900,000 family home in London but struggled to meet standard affordability criteria due to recent business investments. We helped them secure a competitive interest-only mortgage in the UK based on their strong future earnings projections.
The Challenge
The clients faced several obstacles in securing the desired financing:
- Complex Income Mortgage: The clients owned three limited companies, but recent business expenditures and expansion costs reduced their recent net profits on paper.
- Strict Affordability Constraints: Their latest tax returns showed an income just above the minimum personal tax threshold, which traditional lenders viewed as insufficient for a high-value property.
- Target LTV Requirement: The clients required a high LTV mortgage to fund the purchase without needing to liquidate their active business capital.
The Strategy
To overcome these challenges, we structured a deal tailored to the clients’ strong financial trajectory:
- Financial Assessment: We conducted a thorough review of the last three years of business activity and projected future financial performance.
- Underwriter Engagement: We bypassed the standard tax return requirements by engaging directly with senior underwriters, providing current management accounts and demonstrating robust financial health.
- Income Projection Strategy: We highlighted that the projected income for the current year would exceed £300,000, which was more than enough to comfortably cover the interest payments.
- Mortgage Structure: We secured a complex income mortgage on an interest-only basis to keep the monthly outgoings manageable while the businesses continued to grow.
The Results
- Property Purchase Price: £900,000
- Total Loan Amount: £675,000
- Loan-to-Value (LTV): 75%
- Mortgage Structure: Interest-only mortgage
- Projected Income (Current Year): >£300,000
- Key Outcome: The clients successfully acquired their desired London family home while maintaining liquidity in their business ventures.
Why This Matters
For self-employed professionals, recent business expenditures or investments can sometimes result in complex tax footprints that confuse high street lenders. By presenting an evidence-based assessment of future net profits, borrowers can raise capital for property investment or secure residential property without disrupting their company’s cash flow.
Speak to a Specialist
Ready to explore your borrowing potential with a complex income profile? Book a consultation with our team today.