At Diamond Property Finance, we often encounter unique financial scenarios that require bespoke mortgage solutions. This was particularly true for two successful self-employed medical professionals seeking to purchase a £900,000 family home in London with a desire to secure 75% loan-to-value (LTV) on an interest-only basis.
Case Profile:
Despite owning three limited companies, the clients faced challenges in demonstrating sufficient income due to significant recent business expenditures, including the acquisition of new premises and rising overheads.
Their latest tax returns showed income just above the minimum personal tax threshold—far less than typically required to secure a mortgage of this nature. This situation presented a significant hurdle, as standard lending criteria would normally not accommodate such an income profile.
Solution:
To address this, we first conducted a detailed review of the client’s financial activities over the past three years and projected the future performance of their businesses. Realising that the net profits from one or two of the companies could be utilised, we crafted a detailed proposal for lenders. This included explanations of the recent losses, strong profit projections for the upcoming years, and current-year management information that demonstrated robust financial health.
We engaged directly with senior underwriters to present our comprehensive assessment and argue the case for the client’s ability to meet the interest payments based on future earnings projections.
Our efforts were successful: we secured the 75% LTV mortgage on an interest-only basis at a competitive rate. The lender accepted the income projections for the current year, which were projected to exceed £300,000, comfortably covering the interest payments.
