The interesting case of the foreign national first-time buyers

77% of all first-time buyer mortgages were arranged through intermediaries in the final quarter of 2017, according to UK Finance. This means that more than 280,000 borrowers were helped onto the housing ladder by a broker last year.

And you can bet your life that not all of these cases were straightforward. In fact,

Some cases require a skilled underwriter to make decisions rather than go through an automated process. A good example of this is an application we completed at Pepper that we call, ‘The Interesting Case of The Foreign National First-Time Buyers’.

The clients were a married couple called Bartek and Julia, who moved to the UK from Poland to set up a company importing timber products from Eastern Europe.

They lived in rented accommodation while they started the business but, as it grew more established and successful, they decided to buy their own home.

But there were a number of factors that needed to be considered with their mortgage application.

Being foreign nationals living and working in the UK meant they had no UK credit history so not all lenders were willing to consider their application.

And although their business had gone from strength to strength, they only had one year’s published accounts to show. Furthermore, while Bartek owned the business, Julia was an employee whose salary had been kept deliberately low to minimise her tax liability.

What’s more, the loan they required was large – £688,000 on a property valued at £810,000, representing LTV of 85%.

These factors all made the case interesting. But not impossible.

Bartek’s and Julia’s lack of a UK credit history wasn’t an issue. They were able to provide us with a reference from their landlord to confirm that they’d made three years’ worth of rental payments, as well as evidence of paying other bills like utilities and council tax.

We were also able to assess affordability on one year’s accounts for the business and review copies of bank statements to verify income and expenditure.

The loan size and LTV both fell within our criteria so we were able to progress yet another interesting first-time buyer case to completion.

There’s a story behind every mortgage application and it’s often an interesting one. Fortunately, there are lenders with an appetite for the interesting so there’s no reason why 2018 shouldn’t be another bumper year for first-time buyers.