How we helped a contract worker with their first buy to let mortgage
16th January 2020
The Leek United Intermediary Team were approached by a broker to see if we could help with a buy to let mortgage for a contract worker looking to purchase their first buy to let property from their sibling.
There were several interesting points about this case in that the sibling not only owned the property but was gifting the property’s equity. Also, the customer had been in their current employment for less than 6 months and was on a fixed term contract, which didn’t meet our policy of contracts being for at least 12 months.
However, when we came to individually underwrite the case we made sure to look at it as a whole and carefully review the applicant’s employment record and income.
The income was fine as it was over our minimum buy to let requirement of £20,000 per annum. Regarding the contract work, whilst he had been in his present job for just 4 months, as there had been no break in employment between the last contract and this one, we were able to satisfy our requirement of 6 months continuous employment, particularly as the current contract was within the same group of companies.
Also, when we looked at the potential income the property itself would generate in rent, it met our Interest Cover Ratio (ICR) for rental cover. As a result, no further affordability assessment was required and this was assessed as a standard buy to let.
Leek United are able to offer mortgages to both first time landlords and first time buyers and we accept either gifted deposit or gifted equity from an immediate family member. These criteria points really helped in making this case possible.
This case clearly demonstrates the importance of working with lenders who are experienced in dealing with buy to let applications, which can often be more complex than other cases. The value of expert underwriters is also validated here as we looked at all aspects of the applicant’s contract work and their income, this meant we were able to provide the buy to let mortgage they needed.
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