| Loan amount | £285,000 |
| Purchase price | £335,000 |
| Loan-to-value | 85% |
| Property type | Two-bed terraced house |
| Location | Exeter (EX4) |
| Borrower | Academic researcher on stipend |
| Term | 30 years |
| Rate | 5-year fixed |
| Lender type | Specialist non-standard income lender |
The Story
In the charming city of Exeter, Fox Davidson had the privilege of assisting a couple in achieving their dream of homeownership. What made their journey distinctive was the reliance on stipend income, a challenge that required a specialist approach and our specialised expertise as mortgage brokers. This case study unfolds the story of how Fox Davidson guided our clients through the complexities of stipend income to secure a mortgage on a beautiful property in Exeter.
The Challenge
Our clients approached Fox Davidson intending to buy their first home. They had a substantial deposit gifted from family but one of their sources of income was a stipend which presented a unique set of challenges. Traditional lenders often approach stipend income cautiously, considering it unconventional compared to standard employment income. The challenge lay in convincing lenders of the stability and reliability of their stipend income.
Fox Davidson initiated a thorough financial assessment. This involved delving into the specifics of or client’s financial situation. We aimed to present a holistic picture to potential lenders that showcased the couple’s ability to borrow comfortably for the next 5 years.
Fox Davidson collaborated closely with our clients to explore various mortgage products that would align with their needs. We were able to demonstrate a clear career path post stipend and demonstrated that the loan was almost affordable for the applicant with the traditional PAYE income.
The Solution
Overcoming the challenges posed by stipend income
Fox Davidson initiated a thorough financial assessment. This involved delving into the specifics of our client’s financial situation. We aimed to present a holistic picture to potential lenders that showcased the couple’s ability to borrow comfortably for the next 5 years. Fox Davidson collaborated closely with our clients to explore various mortgage products that would align with their needs.
We were able to demonstrate to the lender a clear career path post stipend for applicant one and demonstrated that the loan was almost affordable on the second applicant’s income alone. Coupled with the low loan-to-value we made a strong case for lending despite the lender’s initial reluctance.
The journey with these clients demonstrated Fox Davidson’s commitment to understanding and overcoming the challenges posed by stipend income. After careful consideration, collaboration with specialised lenders, and a specialist approach to their financial situation, we successfully secured a mortgage for the couple in Exeter. We secured a competitive 5-year fixed rate with a high-street lender.
This case study exemplifies our dedication to providing personalised and specialised solutions, ensuring that even individuals with unconventional income sources can confidently pursue their homeownership aspirations. If you find yourself facing similar challenges or have unique financial circumstances, trust Fox Davidson to guide you through the mortgage process with expert knowledge and support throughout the entire process.
Frequently asked questions
What is a high net worth mortgage?
A high net worth (HNW) mortgage is assessed under the FCA’s high net worth rules rather than the standard affordability test. It is available to borrowers with net assets over £3 million or annual net income over £300,000. Lenders read the net assets test literally and include the equity in your main home, and on a joint application only one of you needs to meet it.
How does HNW mortgage assessment differ from a standard mortgage?
HNW assessment is whole-of-wealth based rather than income-multiple based. Lenders consider total assets, liabilities, liquidity, income, and lifestyle costs, then negotiate loan size based on the overall financial picture.
What loan sizes are available with HNW mortgages?
HNW mortgages typically start at £1 million minimum and have no upper cap. Loans of £5 million to £20 million are routine for qualifying clients. Loans above £20 million typically involve syndicated lending or relationship-driven arrangements with private banks.
How long does an HNW mortgage take to complete?
HNW mortgages typically complete in four to ten weeks. Mainstream HNW lenders are at the faster end. Private bank cases involving committee approval, complex structuring, or offshore elements can take eight to twelve weeks.
Further reading: mortgages for professionals, complex income mortgages, residential mortgages, civil servant mortgages.
Completed transaction. This case study describes a live deal arranged by Fox Davidson. Client details are anonymised and figures rounded.
All rates and terms are indicative and subject to individual assessment, lender criteria and property valuation. Your home may be repossessed if you do not keep up repayments on a mortgage.
Specialist mortgage advice for property professionals, high earners, and HNW clients across the UK.