Self Employed Contractor Mortgage Secured for Chinese National Living in London with Right to Remain in the UK

Self Employed Contractor Mortgage Secured for Chinese National Living in London with Right to Remain in the UK

Area
London
Capital Raised
£532k

If you’re self employed and your earnings fluctuate significantly year on year; or, if your self employed income stream was affected by COVID-19 in the 2020 tax year, then you’ll want to hear the solution below for our clients’ self employed mortgage application.

The Scenario

Our client was a Chinese national with indefinite leave to remain in the UK, working as a self employed contractor in the aerospace industry.

He already owned a UK property with a mortgage and was looking to buy a new primary residence in London for the value of £665k. He required an 80% loan to value mortgage of just over half a million pounds.

As per the standard self employed mortgage application criteria, he needed to provide at least 2 years of accounts to prove his self employed income.

Although he did have 2 years of tax returns, his first year of business was barely profitable at about £5k of net earnings.

But his second year of trading was more fruitful and saw him earn close to £100k. This would be more representative of his annual income figures going forward, and he’d continued these figures into the new tax year.

The problem?

Mortgage lenders will only take an average figure across two years of earnings, and won’t necessarily factor in your earning trajectory or potential future income if it's higher.

This meant that our client's most recent annual salary was slashed in half due his low first year of trading.

This was despite the fact that, since filing his £100k year, he had already earned over £150k in the new tax year but hadn’t consolidated his earnings in a tax return yet because the year was still ongoing.

The Solution

There was no way that our client was reaching the loan size he needed with an income multiplier based on 50% of his earnings.

So, we liaised with our client's accountant and our contacts at the lender we’d selected to find a solution (we’d chosen a lender we knew would go the extra mile to facilitate bespoke income scenarios like this).

After a lot of back and forth, the lender agreed to accept two adjusted accounting periods to top up our client's income for his application.

  • Firstly, the clients’ accountant extended his latest accounting period to 18 months. This included the large bulk of income the client had received after the end of the 2020/21 tax year and bumped up his earnings considerably.

  • We then took the 6 months prior to the 2020/21 tax year, which included the clients’ £5k earnings, and recalculated this pro rata to get a further 12 months of earnings.

  • The average of the two new income figures was over double the clients’ initial application figure, and our client could reach the loan size for the London home he could clearly afford.

Speak to us today to see how we can help your situation.

Sam Baker

Finance Broker

Cardiff

0117 959 5094

Are you looking for a similar type of property finance?

As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you.

 

Book Consultation

Fergus Allen

Finance Broker

Cardiff

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Book Consultation

Jacob Phipps

Finance Broker

Bristol

(+44) 0117 959 5094

Are you looking for a similar type of property finance? I specialize in helping international clients source residential and investment property finance for UK property. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Book Consultation

Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need. customDatabaseField-8455

Mathew Phillips

Senior Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Book Consultation

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need. customDatabaseField-8455

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

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Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Book Consultation

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

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Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements. customDatabaseField-8455

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