This week's case study highlights how we were able to help a first time buyer get on the property ladder.
Our clients' challenge
Our client was a first time buyer looking to buy a property in South London for £450,000. The complexity of the case related to his affordability. Despite having a substantial deposit of £100,000 which he had saved over the years, his income meant he could borrow a little over half what was needed and this limited him significantly in the type of property he could buy in his desired area. He had therefore begun the process of researching alternative locations which would be more affordable.
Alexander Hall's solution
The client had been introduced to Alexander Hall by his brother, who was an existing client of the business. On making the introduction and explaining the budget constraints, his brother offered to help in any way possible. Our adviser proposed an option with a lender that could use both of their incomes to calculate affordability for the mortgage, whilst only one would be occupying the property. Due to our client’s brother already owning a property with his wife, we arranged the new mortgage on a ‘joint borrower – sole proprietor basis’. This structure allows the mortgage lender to utilise both brothers’ incomes, whilst only the first time buyer would be on the deeds of the property. This setup achieves the best of both worlds; enabling the mortgage to be backed by two incomes, without suffering the 3% stamp duty surcharge which was introduced in April 2016 for buyers who already own a property. Our client successfully moved in to his new home two months ago, having found his ideal home in his first choice location!
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