We were approached by a broker as her customer was struggling to manage the numerous payments for his existing debts. The customer already had first and second charge mortgages, along with several unsecured debts, and his monthly commitments were becoming difficult to meet.
His credit score wasn’t great as he’d missed payments on both his mortgages and unsecured debts, the most recent being on his second charge, which he’d missed but still paid during the same month. The customer was employed by his family business and had become a 20% shareholder two years ago.
As a portion of the customer’s main income was from the dividend from the family business, we needed a lender who would class him as self-employed. Otherwise we wouldn’t have been able to take this income into account and the amount of money he required would have been deemed unaffordable.
The recommended lender was happy to review the case and accept an accountant’s certificate showing one year’s financials as proof of the customer’s self-employment income. Also, as the 2nd charge payment was late but made up within the same calendar month, the new lender didn’t class it as missed.
The lender was prepared to offer a new second charge mortgage of £62,500 over 25 years with a fixed rate for the first three years.
This allowed him to consolidate his debts of more that £22,000 and pay off his existing secured loan of nearly £40,000. It also meant he only had to make one payment of £600 a month – which was half of the amount he was paying before.
“This client’s circumstances were unusual in terms of deciding how best to help him secure a suitable product. His bad credit and employment status ruled out many lenders – however, our experience and product knowledge meant we knew there could be a solution for him.
“We were happy to help this customer who was able to get back on track with his finances, whilst saving money every month, which would allow him to pay back his debts as part of an affordable plan.”