50 Shades of Mortgages – Part 2

In the second part of our 50 shades of mortgages series, the Promise Mortgages team needed to source a mortgage for a client to purchase a BTL who had no earned income.

The Problem

The client was in the middle of a complicated divorce where during the proceedings, the court ruled her husband, who was a landlord with a portfolio of several BTL properties, should give our client the equity in one of them. The property she was given had a mortgage on it which she needed to redeem.

The culture and custom that our client belonged to meant that she was not a named owner on any of the properties, she had no credit profile, was not registered on the electoral roll and her only income came from maintenance payments – meaning she had virtually no paper trail at all.

However the client wished to maintain the property as a BTL to provide her with income and she also wanted to move to another part of the country into rented accommodation. This meant we needed to source a mortgage for £320K for a first time landlord and first time buyer with no earned income and we needed the offer within 14 days for her court hearing.

The Solution

When we were originally given the case, we first reassessed the property for any increased rental income and this together with the court order for maintenance payments, gave us sufficient income to place the case with a lender. The case was outside criteria but after being discussed at length with an underwriter, further information was gathered and explained and the case was offered in time for the court hearing.

However, days before the case was due to complete, the lender carried out a final credit search and a CCJ for more than £3k was registered. This meant the case now definitely fell outside of the lenders criteria so the offer was reduced. The only way the lender would proceed with the original offer is if this was removed completely from the credit file.

Fortunately, with the help of the broker and the client the CCJ was paid, receipted and removed from the credit file within 3 days, which allowed the case to go ahead with the original loan amount offered.