Right to Buy Purchase with Adverse Credit

The client: 

The client’s objective was to purchase a property through the Right to Buy scheme.  The clients were both brothers, one of whom had learning difficulties and was in receipt of benefits.  The other applicant was his brother’s registered carer and as such received an income from direct payments. He was also self-employed with a business which had been running for only 12 months. Both brothers also had historic adverse credit. 

The Scenario: 

On assessing the application, using the benefit income and direct payments income received for the care of the brother the case was accepted based on affordability and the lender was happy to take the historic adverse credit into consideration.  However, with regards to the Right to Buy papers received from the council, the lender wanted to include the amounts for further home improvements.  This meant that the mortgage was no longer affordable. 

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The Solution: 

As the client had been self-employed for only 12 months the self-employed income provided on the Tax Computations wasn’t enough to take on the extra cost of the improvements to be made on the property.  However, the lender that we placed the client with was happy to work on projected income figures.  The client’s accountant was required to complete an Accountant’s certificate for the projected income figures for the business and had to provide an explanation as to why the projected income figures were higher than the previous year.  The lender was happy to proceed with the projected income figures from the business, and clients are now able to purchase the property from the council. 

Summary: 

As we are a whole of market mortgage broker, we have access to over 300 lenders, some of whom will accept certain benefits income, meaning we can help a wide variety of clients. Also, with our knowledge and skills we can find lenders who will take a view on self-employed income when a business is relatively new which opens a lot more doors to our clients.  

If you have any questions relating to Residential Mortgage, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors. Call us today on 0113 8730 740. Alternatively, please complete this short online form and one of our Advisors will call you right back.