The client, an IT contractor, needed a foreign currency mortgage lender who could accept their day rate income paid in Euros into their limited Company. Only a minority of mortgage providers allow foreign incomes. But that wasn't the only obstacle to overcome.
The other issue was the client had two part-time contracts.
This was a potential stumbling block as many lenders will treat fixed-term contractor applicants with more than one contract as self-employed. Thereby requiring company accounts and likely limiting the client's maximum borrowing amount to salary and dividends at worst, or salary and net profit at best.
Finally, most mortgage providers apply a haircut for non-sterling incomes to allow for currency fluctuations. and if the discount was too steep, their maximum borrowing would be insufficient for the size of loan required.
Our main concern was finding a bank or building society willing to treat the applicant as employed for income assessment, given they had two Euro-denominated contracts.
Fortunately, we managed to source a niche building society two-year fix mortgage product for the client. The lender used 46 weeks worth of the combined contractor day-rate income for affordability.
Even with a 20% haircut applied, to account for potential currency fluctuations, there was still sufficient income for the client to borrow the £549000 needed to complete their property purchase.
The mortgage offer was approved in May 2023. The client was delighted, and he completed the purchase and moved in to his first home that summer.
Case Study 7
Case Study 8
