We were approached by first-time buyers looking to purchase their first home. They had been experiencing difficulties securing a mortgage due to declining profits within their business. They turned to us to see if we could help.
We secured a competitive fixed-rate mortgage with a high street lender. The bank was able to offer a policy exception thanks to a strong business case presented by our broker.
Not every case we encounter at ONOZZI is overly complex, but sometimes a client’s situation doesn’t fit neatly within standard high street criteria. In these instances, they benefit from a brokerage with the right industry contacts.
In this case, the applicants’ business net profit had nearly halved compared to the previous year, despite an increase in turnover. This decline was largely due to significant investment in the business infrastructure.
Most lenders, however, focus solely on net profit (before or after tax) and do not account for such investments. Furthermore, when net profit is lower than the previous year, the majority of lenders consider only the latest figure rather than averaging it, which can adversely affect affordability calculations.
Our key task was to provide lenders with additional context. We compiled a detailed business case outlining the reasons for the inward investment and provided confirmation of the directors’ salaries and dividends via SA302s and tax year overviews.
By presenting this information, we were able to reach an agreement with a prominent high street bank. They agreed to consider the client’s salary and dividends, even though these exceeded the latest net profit figure. Additionally, we provided a strong projection for the upcoming tax year, offering further reassurance to the underwriter.
Our clients had been feeling disheartened by the home-buying process, but we were able to secure a solution that allowed them to purchase their first property. They are thrilled with the outcome and are looking forward to completing their purchase this month.
