The pandemic has made life difficult for many borrowers and our client, a day-rate contractor looking to buy his first home, is no exception. Although he needed a mortgage to purchase the £950,000 property he wanted to buy, he was only two months into his current contract following an enforced four-month break from work because of difficulties securing a contract during Covid.
The client was lucky in that he had help from family with the deposit, with a 25 per cent down payment to put towards the purchase. Therefore, needed a 75 per cent loan-to-value (LTV) mortgage and wanted to add the lender arrangement fee to the mortgage.
But, numerous lenders were sourced but this was a complex case owing to the short period of time. He had been on his current contract, the four-month break from work before that and the family-funded deposit. As not all lenders are keen on this.
Key requirements: –
A lender happy to lend to a day-rate contractor two months into their current contract and with a four-month gap in earnings before that. A lender prepared to accept a gifted deposit. The lender who would add the arrangement fee to the mortgage.
After sourcing the mortgage market, we identified a lender who would agree to lend to a day-rate contractor and would agree to our client borrowing the required amount of £712,500.
In other words, the application process: To support the mortgage application, the client provided evidence of his contract and identity. So, we were delighted to inform our client that the lender had issued a formal mortgage offer for the full amount requested.
Property value: £950,000 Loan amount: £712,500 LTV: 75% Rate: 2.87% fixed for two years Lender product fee: £999 added to the loan Monthly payment: £3,335