Our mortgages department has arrangements with a number of lenders, allowing us to consider other aspects of the income picture; by doing this, contractors can be placed on a similar footing to an employed borrower.
We use the following approach to source the best mortgage for our clients:
Get a detailed understanding of your historical company accounts; this allows us to understand the relationship between turnover, personal income and retained earnings.
Get a detailed understanding of the type of contracting the borrower engages in and how contracts have been structured historically.
Speak to the relevant underwriters at the banks that we think will consider the transaction.
Short-list the banks that will (or might) lend in this case.
Rank the various products offered by these banks and create a risk-specific client report.
We will allocate a mortgage adviser to you to conduct the research. They will establish the relevant factors, agree upon a set of search criteria with you and then conduct a search of the market to find you the best mortgage.
The advice that you receive
We will advise by means of a written report, which will set out the various options available to you. This report will highlight:
All the repayment options
The pros and cons of each option
A final recommendation
View an example of one of our client reports.
Our research models
We have two models for our mortgage research:
Although our research is chargeable, we try to ensure that we don’t do chargeable work if the outcome is unlikely to yield any results. If we believe your mortgage will not be approved at this time, we will inform you at no charge and suggest that the research be performed at a later stage. In some cases, we cannot confirm if the mortgage will be approved without doing the research. In these cases, we will give you the option to proceed or not before we begin researching.
1. Standard cases
A classification of “standard” applies to those cases where:
- You (as the borrower) have Indefinite Leave to Remain (ILR) in the UK or possess a British or EEA passport
- You are employed or, if self-employed, have two years’ tax returns that fit the borrowing requirement
- The loan-to-value (the mortgage as a percent of the property value) is 80% or less
In these cases, your circumstances are likely to fall within the lending policy of most lenders. This allows us to conduct our research without needing to make special arrangements with any lender.
We will provide you with a range of deals that best meet your criteria, advising you on your best options going forward.
2. Non-standard cases
"Non-standard" cases are those cases where:
- You (as the borrower) are not a British passport holder and do not hold ILR
- Your earnings cannot be backed up by two years' P60 employment income in the UK
- The proposed mortgage amount exceeds your annual employment income
- You are a contractor using a limited company and/or umbrella company structure
- The loan-to-value (the mortgage as a percent of the property value) is more than 80%
- You are purchasing a shared ownership property
- The proposed mortgage is greater than £1,000,000
- You are not a resident in the UK
The "non-standard" route will be followed where a case falls outside of standard lending policy. In these cases, we are required to spend additional time on research time and arguing your case with underwriters.
We will charge a research fee upfront when we do the mortgage research. This fee will either be £195 or £375. If the success fee from the lender is above £750, we will not charge you (the borrower) any further fee. However, if the lender success fee is below £750, we will charge you a top-up fee on completion of the mortgage. Here, we set out an example to explain this scenario:
- Miss Jones engages us to process her mortgage for her.
- She is a UK national and needs a 70% mortgage to buy a £250,000 house (i.e. a £175,000 mortgage).
- We charge her £195 at the outset and conduct the research for her. She gets the invoice from us when the research report is produced.
- We then apply for - and successfully achieve - the mortgage.
- On completion, the bank pays us 0.35% of the loan amount (£612.50).
- Our minimum success fee is £750; we therefore invoice Miss Jones a top-up fee of £137.50 on completion.