One of the major stumbling blocks that mortgage borrowers are faced with in this difficult market is mortgage affordability. Lenders have tightened their affordability tests, and this has led to many borrowers struggling to get the level of mortgage that they require for house purchases and remortgages. In this case study, we discuss how Oportfolio’s advisors have helped one of our clients increase maximum mortgage loan when their original advisor couldn’t help!
Client Needs To Increase Maximum Mortgage Loan But Original Broker Can’t
Our client was referred to us through their employer. We have a partnership with their business where we offer discounted mortgage advice for all of their employees. The client was looking to get a new mortgage loan of £260,000 and had already been speaking to a previous broker. Unfortunately for them, the maximum mortgage loan that their original broker was able to get them was £200,000. This was mainly due to the client’s income and bonus structure, the new restrictive mortgage lending that most lenders are applying at the moment to new applications. Because of the maximum loan his broker could get, this meant that he was unable to afford the new house he was looking to buy, unless he put down more deposit which he didn’t have available.
How Did Oportfolio Mortgages Help?
Feeling deflated by not getting anywhere with his current broker, our client decided to take a punt with us through his employer referral scheme. Immediately after our client’s details were passed over to us, our broker Jade Pinkerton contacted him to see how we could help. She had a free initial mortgage consultation with the client and got to know more about him and what he was looking to do. She went through everything that his original broker had gone through with him, and got an understanding of where the kickbacks were coming from and began to form a plan of action to increase maximum mortgage loan for the client.
After thoroughly getting to know the client’s situation, Jade began to contact lenders and run the scenario by them. Soon enough, she managed to find a lender who would be willing to lend the entire £260,000 loan and get everything agreed and locked in place for the client.
What Did Oportfolio Do?
Jade’s first educated research led her to using a lender that would accept one years’ bonus income which the client had. The client has been told by previous brokers that all lenders needed two years’ bonus figures, so this hadn’t been included in any affordability previously. Our client’s partner is on maternity leave currently, so doesn’t have income. However, Jade discovered that she could use her return to work salary figure with the lender, as long as her employer is happy to confirm it. This option hadn’t been explored by the previous broker, so they didn’t know that it was possible.
Jade also learned that the client was getting a pay rise the following month. The lender that we found would allow us to use this higher figure for mortgage affordability purpose, as long as his employer will confirm it. Finally, the client was concerned about their car finance agreement of £300pcm. Their current mortgage lender said that they would need to pay it off early If they wanted to increase the loan available to them, but this wasn’t the case for us. The lender we found agreed to ignore the commitment because they confirmed that they have the ability to pay it off, if they needed to. They can pay it off later down the line, or on completion, but they do not have to do this right away.
Competitive Mortgage Rate
The final thing that our broker did for this client was to help them secure a very competitive rate in a volatile mortgage market. The clients were tied into their current mortgage rate at 2% for another 2 years, with penalties of £4k to get out of it early. When enquiring with their current lender, they were told they would need to pay this fee and they will lose the 2% rate and likely be charged the more recent rates of 5% and 6%.
However, Jade found a way forward to keep the 2% rate for them, and avoid paying the ERCS – saving them a small fortune and allowing them to have more money to use towards the deposit/moving costs. Saving has been calculated at roughly £21,500 over the 2 year fixed period.
Speak To an Expert Mortgage Broker Today
With all of the above, this client’s previous broker hadn’t asked enough questions to get to know the client and their situation better. Their previous advisor and lender hadn’t provided them with the reassurance and suggestions that they needed. Luckily they came to us and we were able to help them out. Speak to one of our brokers today to see how we can help you.