A couple has secured their dream home despite being turned down by a mainstream lender after being accepted for a second charge loan in just four days.
Philip Ward*, a self-employed applicant, and his partner Debbie Foulds*, had a mortgage offer from a high street lender. However, even with savings, they needed £50,000 more to meet the property’s purchase price.
The pair, who were living with family at the time, owned multiple buy-to-let properties. However, the property they chose to secure the loan against was one which the applicant’s brother was living in.
They then approached lender, Together, to look into something called a second charge loan.
What is a second charge loan?
A second charge is basically a second mortgage. It’s a loan which is secured against your home in the same way as a traditional mortgage. However, customers can take out the second charge loan with another lender, so they can shop for the best deal.
They are commonly used in the same way as a remortgage or a personal loan – to raise additional money for things like home improvements. But people also use them to avoid early repayment charges associated with remortgaging or if they need to raise some money but don’t want to switch away from their current mortgage rate.
Supporting a home purchase
Philip and Debbie’s circumstances were a little more complex. However, Together agreed a regulated second charge of £50,000, secured against the buy-to-let, enabling the couple to buy their own home.
As Philip is self-employed, the application was submitted using a tax calculation. Meanwhile, Debbie, whose name also appeared on the application, used her pay slips.
However, there was an additional hurdle – the couple still didn’t meet Together’s affordability criteria. Therefore, as the figures were for the year ending April 2018, an accountant’s certificate was used to look at income projections for the following year. This meant the couple were able to meet the criteria.
Nick Jones, head of specialist distribution at Together, said: “This kind of case demonstrates how we can take a more flexible view, allowing the couple to follow their dream of home ownership despite complications in finance.
“We were able to thoroughly examine the case and as one of the applicants is self-employed we were able to look at their current income as well as future projections.”
The case was brought to Together by Loan.co.uk, who worked closely throughout the process to reach the successful outcome.
Aaron Noone, regional director at Loan.co.uk, said: “We had a very urgent case that needed multiple individuals to help, bringing together time and resources to focus on a customer, under significant pressure to complete the purchase of their new home.”
“We brought the case to Together because of their ongoing exceptional service, and we knew their flexible approach was ideal for this scenario in helping to achieve a positive outcome.”
*Names changed
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