Case studies

The challenge he was having with the current bank and broker is that they didn't understand why his payslips would be showing additional pay, bonus and commissions with a minimal rate for basic pay. The mortgage amount was deemed unaffordable based on the lender’s calculations of £12,500 per year (the basic pay element) and would have required an income multiple of 16x income to achieve this.

After an initial consultation with Cleerly, Nik uploaded his documents almost immediately. Within 24 hours, the Cleerly adviser was able to give him a recommendation for a mortgage provider who would lend the required loan amount, as income was based upon Nik’s contracted day rate earnings, rather than the umbrella payslips.

After providing Nik with the feedback and a suitable recommendation, Cleerly were able to get a full application submitted within 24 hours. Because of strong relationships with contractor-friendly lenders, Cleerly ensured that the contract income was assessed at point of submission and no other information was requested by the bank other than the valuation of the property.

The mortgage offer was received within two weeks following a successful property valuation. A job well done where others had nearly caused the purchase to fall through!

The mortgage broker placed Harriet with another high street bank, NatWest. This was closer to a solution, but the outcome was the same. NatWest had a £75,000 per annum income threshold to treat Harriet as a professional contractor, and her income was below this threshold so they declined the application.

Following some direction from her umbrella company and a Google search, Harriet found Cleerly. She was in tears when she spoke with the Cleerly consultant, as she didn’t know how to get rid of the Help-to-Buy loan and switch her deal.

Following a reassuring initial consultation, Harriet submitted some documents to Cleerly, with detailed research and feedback provided on the same day by her new adviser. Within 48 hours of the initial phone call to Cleerly, a mortgage application was submitted to a new lender who was umbrella-friendly and did not have restrictive income thresholds, resulting in financial approval by the underwriter within one week of the initial Google search! The mortgage was duly offered a few days later.

Not only was the punitive Santander rate avoided, there was also enough money released to settle the Government Help-to-Buy loan, achieving both of Harriet’s key objectives!

“Amazing!!! words cannot express the joy in my heart, 11th of September 2023, I was in tears, after receiving a rejection from my current provider just on the basis that I am now a Nurse contractor! I remembered reading somewhere in my contract with the umbrella company (NASA), that they offer a mortgage service, so I quickly reached out, explained my situation to the lovely lady who answered the phone and was immediately directed to a gentleman (Will), who I can only describe as AMAZING, he could tell I was crying, he was patient and he assured me that he can help. There was no time to waste, he knew his onions and fast forward 2 weeks later (25/09/23) I had my Mortgage offer.

Thank you so much, Will and the rest of the team, I will be recommending!”

The Cleerly mortgage consultant who Lucy spoke with confirmed the reason other brokers were citing affordability problems. There were two main issues that had to be tackled:

• Lucy’s partner’s income via the company was based on salary and dividends drawn over completed tax years. The figures were not reflective of the gross contract rate because company expenses were deducted before dividends, and the draw was deliberately limited to what was required to cover living costs for tax efficiency.
• There were high personal costs for education fees in respect of the children, and also a maintenance payment being made to an ex-partner; both of which compounded the affordability problem when non-specialist brokers were using salary and dividends alone.

The way to get around the issues was to approach lenders on the basis of the contract, which was at a good rate. The contractor had also had a 3-month gap between contracts in the 12 months preceding the enquiry, which made circumstances a bit more challenging.

Following engagement with underwriters at Cleerly’s lending partners, a solution was quickly found with a couple of lenders offering competitive rates. Unfortunately, the property that was being pursued by the family was lost, so they decided to continue with the same of their current home and move into rented accommodation so they would be chain-free when they found their dream home.

Following detailed conversations with his adviser about his preferences, it was agreed that interest-only was suitable due to his repayment strategy, which was to use equity in the current home to downsize before the end of the mortgage term. Jason’s age also meant that proving affordability over his working life would have been challenging given the reduced number of years he could take a mortgage for. There was also some credit card debt on 0% that was going to be paid off over time, further impacting affordability.

Following detailed research, the Cleerly mortgage consultant found a lender who could agree the required borrowing for a large loan over £500,000 on an interest-only basis, whilst leaving the credit card debt in place. One of the key features of the recommended lender was their ability to annualise daily contract income over 48 weeks (alternatives worked on fewer weeks), and they also ignored the umbrella company’s deductions. These factors, combined with his partner’s small income, meant that Jason could meet lender affordability and obtain the borrowing needed to repay his current mortgage, in a manner that was affordable to him and his partner.

What Jason had to say about his experience working with us:

“I was impressed by the service provided by Olivia and team, after some initial discussions Oliva provided sound advice and discussed all options. She talked me through the process, so it was clearly understood and sourced a good deal. Updating me on a better option when one arose whilst I was in the process of completing application documents etc.

Olivia was quick to answer any questions I had and to also handle any issues with the Lender making life very easy for me. The whole process was smooth from start to finish.”