My partner and I earn well over £1m a year - but we still struggled to get a mortgage for our perfect home.
A self-employed couple who are both company directors earning seven-figure salaries nearly lost out on buying the £3.5million home of their dreams – because of their complex incomes.
Property investors Mat Rees, 42, and his partner Lucinda Tetler, 32, had their hearts set on their own five-bedroom home; complete with swimming pool, sauna, gym and cinema room, in the leafy town of Wilmslow, in Cheshire’s famous ‘Golden Triangle.’
But when the couple applied for a mortgage, the high street lender they initially approached took “months and months”, leaving the couple worried they would lose their chosen property.
“It took them six weeks just to get a valuation – and there was always the threat that someone would come along with the finance needed and snap up the property. We knew that they wouldn’t wait around and we got panicky that we would lose it.”
Mr Rees said that the mainstream lender’s automated computer assessment of their complicated income streams had proved a major stumbling block to them receiving the swift mortgage offer they needed.
Both he and his partner are directors of property group Beneficial Estates, which incorporates 14 companies. The family also owns a portfolio of 209 rental properties, providing an annual income of around £2m.
Mr Rees said the initial lender wanted a combined total of 18 payslips and six P60 end of year tax forms.
He said: “We both make reasonably large incomes but we couldn’t just give them a payslip each to neatly reflect this... ...if you say to a high street lender that you have three lots of different incomes, you can hear the gears grinding to a halt when you’re speaking to them. ”
After becoming frustrated with the long-winded process, Mr Rees turned to Together Premier, a lender which specialises in providing mortgages for self-employed people such as company directors and others with complex income structures.
He said: “We contacted Together Premier, who I’ve worked with previously, and spoke to them on the Friday. By the Monday, I’d been booked in with an in-house mortgage adviser, had a mortgage offer on the Wednesday and completed on the Thursday. The whole process took just four days.”
Mr Rees said: “Together Premier moved so fast to help us. I had a feeling it was going to go back on the market and people were waiting to snap it up, but we completed on the day the estate agent was going to put it back on the market, so everything worked out perfectly.”
Scott Clay, Head of Intermediaries at Together Premier, who arranged the mortgage, said the major lenders were “failing to keep pace” with modern ways of earning an income.
He said: “Self-employed borrowers whose circumstances are more complicated than usual could struggle to get a mortgage with high street lenders. “The larger lenders, often rely on automated systems to assess mortgage applicants’ income, which can often lead to delays. In the worst case scenario, the borrower could be refused a mortgage, even if they can easily afford their monthly mortgage repayments. “Being self-employed is a life choice for many people, for all kinds of reasons, and this group shouldn’t be locked out of the mainstream mortgage market simply because they don’t conform to a tick-box approach. They should consider a lender which manually underwrites mortgages and can be much more flexible.”