My clients, a couple in their sixties, were looking to buy a new main residence with a purchase price of £1.6m. In this instance their age was going to be a substantial obstacle to overcome; especially as they were, as the owners of a limited company, both self-employed. On top of this, they were drawing no fixed salary or dividends from the company – a factor which created additional hurdles. Obtaining a self-employed mortgage loan as a business owner can undoubtedly be tough but there are often ways to get around it.
These clients were the current owners of a mortgage-free property (otherwise known as unencumbered), but their income didn’t meet the lender’s generic requirements for a mortgage of this size. My clients’ daily living expenses were also relatively low, so they were only taking out necessary funds to sustain themselves rather than drawing out a large salary sum. This is a typical problem when it comes to self-employed mortgage loans, with many entrepreneurs struggling to obtain a mortgage simply because their income doesn’t conform to a ‘standard’ bracket.
I was determined to secure the best self-employed mortgage loan result for these clients. I decided to approach a lender who I thought would be prepared to take the company’s net profit figure into account, in order to secure the most competitive loan.
I spoke to a private bank who were happy to offer a ten year term product with a 2 year fixed rate at 2.39% on an interest only basis. This meant my clients received an excellent loan to value at 75% of the £1.6m purchase price, which would not be affected by interest rate rises for at least 2 years.