The Intermediary – February 2025 - Flipbook - Page 54
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Once the property is in a mortgageable
condition, we could then look at providing a
residential mortgage loan.
C AS E ON E
Self-build mortgage with
irregular income
client earning £120,000 annually as a
freelance consultant aims to secure a selfbuild mortgage to construct a £600,000
home on a plot of land purchased for £150,000.
The client plans to use £50,000 savings for the
initial construction phase, but requires additional
financing to complete the project.
Lenders are concerned about the irregularity
of the client’s income, which has fluctuated
significantly due to the nature of freelance work.
The client lacks detailed projections for the total
build costs, and some lenders require a fixed-price
building contract that the client has not secured.
A
TOGETHER
While Together would need to look into the nature
of the build to confirm its plausibility, the client
would have options when it comes to affordability.
We could use projections of income for the
coming year with an accountant’s reference
form, comparing this with the previous two years
income. Rather than using an average of those two
years, Together could look to use the projection if
it is confirmed by the client’s accountant.
We would still require a schedule of works and
information regarding the affordability, but if we
were comfortable with the professionals involved
in the project, we could potentially look to help
by offering 50% of the 90-day value on the land,
and potentially cross-charging against any other
properties owned.
HARPENDEN BS
WEST ONE LOANS
A client with an irregular income is not an issue
for us at West One, and we often work with selfemployed or freelance professionals.
We currently do not have an all-encompassing
mortgage product to offer for this case; however,
we could initially look to provide a bridging loan to
cover building costs, supporting the project with
the knowledge and experience of our development
finance team.
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The Intermediary | February 2025
Although we use the latest year’s income figures
for affordability, in this instance we would
probably average the income, and also look to see
what the future income is likely to be.
However, we would require a final build costing
to be in place in order to work out how much we
could lend, which is 75% of the land value and the
build cost.
It may be that £50,000 would not be enough to
cover the difference between the amount we could
