Our client, who worked for his family’s company, had recently had his salary increased from £60k to £250k per annum. His current bank was unwilling to offer a mortgage based on the new salary until it had been received for six months.
He was seeking a £900k mortgage for a £1.3m property and was considering buying the property with a bridging loan.
After successful negotiations with senior underwriters and case managers, we secured a mortgage at prime residential mortgage rates based on the client’s current salary.
The biggest issue that the client faced was that, as he was employed by a family company, almost all banks would insist on a six-month track record of receiving the new salary before the application could be considered.
We approached a major bank that was able to secure a policy exception through their large loan underwriters who can sanction cases outside of standard policy.
Initially, the bank was inclined to decline the application due to the standard 6-month rule. However, through direct negotiation with the underwriter and senior credit managers, we managed to have the case reinstated. We directly engaged with the underwriters, proposing letters of comfort from the client’s accountants, and providing further rationale for the significant salary increase. This approach led to the case being reconsidered and eventually approved.
Our business case was built by demonstrating that the client had been actively involved in the family business for several years. They had lived in a large family home and had no need for a higher salary until now.
We provided the group company accounts with confirmation provided by the firm’s accountants that the salary was sustainable and in line with the role’s responsibilities.
Furthermore, the client had recently bought a buy-to-let (BTL) property, which had been fully renovated but was not currently tenanted. While some lenders would have insisted on a new tenancy agreement being in place, the bank was willing to accept a letter from an ARLA-registered letting agent to confirm the potential rent to offset the mortgage payment.
The client was delighted to secure a mortgage on a prime residential rate. Without our intervention, he would likely have had to secure bridging finance, which could have cost him around £60k in interest and fees over six months.
This case underscores the importance of persistence and innovative problem-solving in overcoming standard lending policies and securing favourable outcomes for our clients.
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