Mortgage agreed for self-employed financial adviser using draft accounts
Our client asked for help to secure a mortgage based on his draft accounts to enable him to secure a larger loan.
The average figure of his two years accounts was not sufficient to borrow enough to purchase the house he wanted. As the projected profit for the third year was higher than the previous year, he hoped this would increase his borrowing potential.
His accountant calculated the draft figures using the income for the first eight months, they were the basis for the projections for the remaining four months.
Solution
Trinity’s adviser approached a high-street bank willing to look at draft accounts for selected professionals whose income is expected to improve.
The application was assessed by a senior underwriter and subjected to plausibility checks. The case was approved and the offer produced within three weeks.
As the mortgage was just below 90% loan-to-value, the client opted for a two-year fixed rate as he may move home over the near term.
Case details
Property: Hampshire
Value: £310,000
Mortgage: £278,000
Rate: 2.09% fixed until 31 October 2019
Reversion rate: The bank’s standard variable rate, currently 4.70%.
The overall cost for comparison is 4.45% APRC representative.
Lender’s arrangement fee: £999
Mortgage term: 35 years
Repayment type: Full capital repayment.
Loan-to-value: 89%
Early repayment charge: 3% of the loan amount until 31 October 2018, then 2% until 31 October 2019.
Overpayments: Up to 10% per annum without charge.
Representative example: A mortgage of £278,000 payable over 35 years, initially on a fixed rate for 24 months at 2.09% and then on a variable rate of 4.70% for the remaining 33 years, would require 25 monthly repayments of £937.16 followed by 395 monthly repayments of £1,332.03. The total amount repayable would be £550,515.85 made up of the loan amount, plus interest (£270,581.85) and fees of £999. The overall cost for comparison is 4.45% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
Call Trinity Financial on 020 7016 0790 to secure mortgage based on draft accounts
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