Professional mortgages based on projected income

If you run your own business, looking at taking a mortgage can be a daunting prospect. If you’re embarking on a new business, you may feel there’s no chance of a positive mortgage application decision. Both scenarios are incorrect, and we have worked with many clients in this position to find them finance options to fit with their individual circumstances.

We work with Private Finance, who have successfully negotiated billions of pounds worth of mortgages. They are independent mortgage brokers whose mission is to exceed expectations through the procurement of competitive terms and a suitable solution, quickly and efficiently.

Here’s an example…

A client had been working at a major accounting firm for several years, earning a salary of around £90,000 per year, when he was offered a new position at a competing firm paying £160,000 annually. Rather than accept this offer, he decided to set up a consultancy of his own alongside one of his colleagues. This decision looked to be a sensible one, and after just two months of business he was able to show earnings of £45,000 and proposals of over £171,000.

Despite his respectable earnings history, as well as the early signs of promise shown by his fledgling business, he was unable to find a lender willing to factor in the entirety – or even the majority – of his projected income. This was necessary as the property he had set his sights on was worth £660,000, meaning that, combined with his deposit of £140,000, he needed a mortgage of £520,000.

In addition, the client had £50,000 set aside to meet his mortgage payments on the off chance that the business earned less than expected during its first couple of years.

Many lenders are often unwilling to accommodate self-employed borrowers without two years’ worth of accounts. With this in mind, Private Finance needed to take a more tailored approach, so they pinpointed lenders in the market who typically show the greatest degree of flexibility in order to explain why this client’s unique circumstances deserved special consideration. This task would have been extremely difficult – perhaps impossible – without Private Finance’s access to the whole of the market and strong working relationships with a wide range of lenders.

Private Finance identified lenders that they believed might be open to the idea of lending to this client – most of whom were small building societies – and presented them with a folder of documents to demonstrate the earning potential of the client. Specifically, they provided evidence of the lucrative job offer that the client had rejected before beginning his new consultancy firm, the client’s company’s net profits to date, and his business plan and accountant’s projection.

Private Finance found a building society that was willing to lend the full amount required of £520,000 on a two-year variable rate of 1.89% and a loan-to-value of 80%. With this loan, the client was able to purchase the property he desired.

If you’re looking for bespoke mortgage options, whatever your circumstances, we can help. Contact our Alderley Edge branch for a confidential discussion: 01625 540340,