Self-employed director secures extra £230k for mortgage in 4 days despite complex personal situation
UK mortgage rate cut needed today for financial and mental wellbeing, say experts. But will it happen? Find out their predictions, plus a success story for self-employed mortgage applicants.
According to Katy Eatenton, a Mortgage & Protection Specialist at Lifetime Wealth Management, “The only thing that will boost confidence in the currently turbulent mortgage and property market is for the Bank of England to make a bold move and drop rates.”
Eatenton in an interview with the NewsPage Agency said, “Threadneedle Street has an opportunity to get ahead of the curve for once. But I don’t think a cut is likely until the end of the summer. In the meantime, the property market will continue to stutter, and borrowers will continue to feel the pain.”
This pain is especially felt by the UK’s the self-employed who often struggle to find high street mortgage lenders that take all their income and circumstances into account. However, there was a glimmer of hope for one self-employed security company director who wanted to remortgage and transfer equity from a previous relationship.
The director worked with his broker Dynamo to get his application approved in just four days. The broker went to The Mortgage Lender (TML) who has in the past issued mortgages to “non-traditional” income earners. The applicant in this case reportedly secured £230,000 more than he would have if he went to a traditional lender.
Complex situations
Unlike some lenders who focus on a long income history, TML said it considered the applicant’s latest year’s pre-tax profits and salary to determine affordability. This resulted in a significantly higher borrowing limit.
Not all lenders understand or want to consider complex situations. But TML factored in the applicant’s need to raise capital and considered the situation beyond a simple income number. The self-employed direct was able to secure a mortgage offer for 75% of the property value.
Tony Field, Sales and Operations Director at Dynamo, said his was a self-employed success story in the current market, “This success story highlights how TML can handle complex situations and get comfortable with non-traditional income.”
Louise Apollonio, Head of Corporate Accounts at The Mortgage Lender, said the lender supports the self-employed and those with less traditional income streams.
“This case is a perfect example. We provided a much larger mortgage based on recent income and processed the application quickly,” said Apollonio.
Don’t hold your breath for a base rate cut
The rate which was secured in this particular case was not reported, which brings us back to the topic of rate cuts.
Samuel Mather-Holgate, Independent Financial Advisor at Mather and Murray Financial is not confident the Bank of England will give us some breathing room just yet.
“There is no chance the Bank of England will cut rates this summer,” he told NewsPage. He continued, “Their decisions have confirmed that they are not forward-looking and will only respond once inflation is below target. This means there will only be one cut this year, and that’s bad news for the UK businesses, households and the broader economy.”