Applicants were self-employed directors of a care home and had only been trading for 2-years.
They made a small profit during the first year, but this was due to not having to pay any corporation tax for that year.
Second year profits were considerably higher and in order to maximise the borrowing, a lender that would use the latest years profits + directors salary + latest years profit from land and property was required.
Mainstream high street lenders had declined the application at a time when market conditions were uncertain due to Covid-19. The lenders stance was that the first year profit was only there because no tax had been paid, hence they decided to decline the case.
At a time when no other lender was getting close to the borrowing amount required, we managed to secure a mortgage with a specialist lender and the client was able to complete the purchase of their dream home!
Please note, that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.
Published Feb 2021.
It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.