At James Leighton, we recognise the importance of flexibility in lending criteria. Many people who are looking to get onto the property ladder or buy a new home have variable salaries, often boosted by bonuses or working extra hours around seasonal demand.
For employees who do not have a consistent monthly salary throughout the year or whose total annual income is supplemented by bonuses, finding a suitable mortgage product can be challenging.
Sometimes clients may also face affordability challenges based on outgoings such as childcare costs, which can affect the loan amount offered. We can simplify the process of finding mortgage products that suit the diverse financial circumstances of our clients.
In cases where lenders do not provide flexibility around affordability assessments, it can mean that the mortgage applicant is unable to buy the property they are interested in. If lenders do not factor bonuses into their affordability calculations, the loan amount offered may result in a lower price range for properties that the applicant can afford to purchase.
For situations like this, we identify lenders who provide more flexibility in proving affordability, allowing us to help people buy their desired property based on their full income.
The case study below illustrates how our tailored mortgage services assisted a grateful client who had faced challenges in affordability assessments due to receiving a bi-annual bonus and incurring childcare costs.
Background and challenges
We were contacted by H.S., who had gone through the frustration of not meeting the required affordability for the property she wanted to buy. The first issue was that Nationwide’s affordability calculations included either annual bonuses or quarterly bonuses.
The client’s bonus structure was bi-annual, so the lender assessed her affordability based on an annual bonus structure, which only factored one annual bonus into the calculations, rather than the two annual payments.
The mortgage loan offered fell short of what the client required to afford the property she wanted to buy. This meant that Ms S. had to resubmit an application with an alternative lender, but the challenges did not end there.
The first alternative lender declined the application due to issues with sewer pipes located in the area. She faced further issues with the next lender, who flagged a concern about the number of Buy to Let [SH1.1]properties in the area, potentially affecting the ability to resell the property. Again, the mortgage offer was declined.
Another lender declined an application based on childcare costs, despite the fact that these costs were due to end within the next three months.
The mortgage advisers at James Leighton regularly support clients facing difficulties in finding mortgage products for a range of unusual reasons. Through our vast knowledge of the mortgage market and the close relationships that we have with our network of lenders, we constantly deliver positive outcomes like this for our clients.
Tailored solution
Our mortgage adviser assessed the available options based on the numerous challenges the client had faced in her mortgage applications.
We identified that TSB was able to assess affordability from bi-annual bonuses and had not flagged issues such as the sewer pipes or the volume of Buy to Lets[SH2.1] in the area as risks. The remaining barrier with TSB was that childcare costs affected affordability, and a lower loan amount had been offered.
Our mortgage adviser contacted the Business Development Manager at TSB to discuss the situation and outlined that the childcare costs would soon come to an end. The underwriters agreed to disregard the childcare costs and offered the required loan amount for the client to afford the property.
Outcome
Our client, H.S., had experienced multiple disappointments through a range of application complications and was concerned that she would miss out on her property.
However, through the intervention of our mortgage team, we were able to use our relationship with the Business Development Manager at TSB to overturn the loan amount deduction for childcare costs.
Ms S. received her mortgage offer and was able to complete the purchase. She was extremely grateful for the work undertaken by our mortgage adviser. Although the journey to achieving the required outcome was complex and frustrating, our tailored mortgage broker services ensured that the client was able to purchase her new home.
The mortgage advisers at James Leighton regularly support clients facing difficulties in finding mortgage products for a range of unusual reasons. Through our vast knowledge of the mortgage market and the close relationships that we have with our network of lenders, we constantly deliver positive outcomes like this for our clients.
This is for illustrative purposes only and does not constitute advice.
Related case studies
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Complex income
Many cases we encounter reveal issues with how lenders approach affordability calculations.
- Call: 0115 870 9520
- Email: enquiries@jlfs.co.uk