£540,000 – 90% Loan-to-Value Mortgage with Non-Standard Income

The Story

Fox Davidson was approached by clients looking to purchase their first main residence.

They had non-standard income in that the first applicant was a director of a limited company and the second applicant was a dentist – effectively a sole trader.

Applicant 1 owned 50% shareholding of his successful business, with good net profits, but he took minimal dividends and a basic director’s salary.

Applicant 2 was a locum dentist, but when the coronavirus pandemic hit, she had lost work at her practice and claimed the SEISS self-employed government COVID-19 grant.

This showed on her bank statements, although, in reality, she had not needed to use the money and had it sat in savings.

She had now agreed to a new fixed-term contract at a new dental practice with a guaranteed draw.

The Challenge

We needed to look at using the first applicant’s share of net profit rather than the salary and income declared on his tax calculations.

Fox Davidson has good working relationships with many lenders who are able to take a director’s theoretical share of net profit as income rather than what is declared on the tax calculation.

Next, we needed to find a lender who could be comfortable with the second applicant having taken the SEISS grant, as well as having just started a new fixed-term contract.

The Solution

Fox Davidson has excellent relationships with non-standard lenders who can take the time to understand a client’s position and become comfortable in lending, even at 90% loan-to-value.

We made sure they were comfortable with using the first applicant’s share of net profit, which showed a healthy, consistent income for the company over the last few years.

We then talked with the underwriter at length regarding the second applicant’s situation.

Although she had claimed the SEISS grant, she hadn’t needed to use it and secured a new contract with a dental practice that was eager to make her an associate once the contract ended.

We supplied the underwriter with a letter from the new practice confirming this, so the underwriter was able to understand that these clients were in a relatively strong position and agreed to the mortgage at 90% loan-to-value.

The pandemic has had an effect on everyone’s lives, and taking the time to understand how any changes might have affected an applicant’s livelihood allow us to present a case in the right way to the right lender.

Mortgages For Self-Employed

Fox Davidson is an award-winning team of property finance consultants. To discuss your property funding requirements, please email enquiry@foxdavidson.co.uk or call us on 0117 989 7950.

Sarah Fox-Clinch

Director & Property Finance Consultant

About: Sarah has been in the mortgage industry for over 20 years and has amassed considerable experience in complex lending situations. Her passion is assisting clients with high-value transactions, property with acreage, and lending based on complex income. Sarah’s work ethos is to focus on each individual and give the time and support needed to help them move forward with their lives.

Favourite Film: Alien or Blade Runner

Quote: “Wanting to be someone else is a waste of who you are.” – Kurt Cobain