Case Study: Lower Income and Credit Issues

Phil and Julie were renting a property and looking to buy. They have a severely disabled child and were hoping to borrow £135,000 to achieve their goal.

Both of them had lower salaries which couldn’t support the level of borrowing they were after, and in addition to this there was an issue of a credit default from a previous relationship which would affect any mortgage application.

Having already submitted an offer on a property they loved, Phil and Julie were in need of a solution.

Our solution

Given the issues Phil and Julie would come up against with most lenders due to their salary levels and credit history, we needed to think outside the box.

We looked for a lender that would consider Child Tax Credits, Carers Allowance and Child Benefit on top of salary. Added to this we needed a lender which could offer a mortgage based on good salary multiples.

After searching the market and following discussions with potential lenders, we found one which was willing to consider 100% of the Child Benefit, Carers Allowance and Child Tax Credits.

A major plus was that although the lender credit scored in the application process, they do not use this to underwrite the loan and prefer to use a common sense approach. This meant the application was more likely to be accepted unlike with usual high street lenders, who simply look for a good credit score.

The result

Through the use of other benefits as part of income and selecting the right lender who was sensitive to the clients’ situation, we got Phil and Julie the mortgage they needed.

Both clients are extremely happy that we found them a solution, as they were losing hope of buying the home they dreamed of.