YMP: Broker Saves Declined Deal
One of our advisors recently completed a residential mortgage application for a property in London, which required the insight of a trained financial broker to overcome some unforeseen financial hurdles.
The property, a house being sold for £540,000, required a £400,000 mortgage to cover the remaining purchase after the deposit of £140K was factored in.
The couple purchasing the property, both first time buyers, were self-employed and doing reasonably well in their business. At an early stage the couple decided that they may need the help of someone more experienced with mortgages and regulated finance, as they were unsure of who they might be able to secure a mortgage with, so they decided to reach out to a member of our network for help.
Due to this, and their comfortable deposit, they had initially put an application in to a popular high street bank, expecting it to be approved with no issue. However, much to their surprise, it had been declined.
The advisor then reached out to the lenders Business Development Manager (BDM) who confirmed that it should have gone through but final decision of underwriters was unfortunately to decline the application.
Upon review, they discovered they had been denied the mortgage because their employment status had recently changed. Despite them being self employed for a few years, within the last two years they changed their business model, making significant alterations to the legal structure of the business by dissolving one business and incorporating two new businesses in its place.
After speaking with our mortgage advisor, who instantly identified the issue and helped elaborate on rationale for the couple, who were still somewhat in the dark, they began looking at lenders through which they could potentially place the deal.
The advisor considered a few lenders, both prime and sub-prime, before settling on Kensington for the mortgage submission, who after some fact checking and further communications, approved the application.
In total the case generated £2,000 in commissions, the couple are now happily moved into their first ever home and are even considering getting involved in Buy-To-Lets in the future, with a view to arranging finance through ourselves, another potential income earner.