Case one · First-time buyer
Two salaries, a 5% deposit and a declined application
| Situation | Joint income £61,000. Deposit £14,000 on a £265,000 flat. Already declined once by their own bank. |
|---|
| The problem | The decline had nothing to do with income. Six months of statements showed a small overdraft used every month before payday, and a buy-now-pay-later agreement taken out during the process. |
|---|
| What was done | Application paused for three months. The overdraft was cleared and stayed clear, the agreement was settled, and no new credit was taken. A lender was then chosen that treats recent conduct rather than a scorecard as the deciding factor. |
|---|
| Outcome | Agreement in principle at 95% loan to value, then a formal offer. The three months of waiting cost them nothing, because the alternative was a second decline on the file. |
|---|
The lesson: a decline is almost never about whether you can afford it. What lenders actually check.
Case two · Limited company director
The same accounts, and 170,000 pounds of difference
| Situation | Director of a three-year-old consultancy. Salary £12,570, dividends £22,000, and £68,000 of profit deliberately retained in the company on the accountant's advice. |
|---|
| The problem | On the standard reading - salary plus dividends - assessable income was £34,570, giving about £155,000 of borrowing. Nowhere near the £320,000 needed. |
|---|
| What was done | Placed with one of the lenders that uses salary plus the director's share of net profit before tax, whether or not it was drawn. Assessable income became £80,570, supported by an accountant's certificate and two years of company accounts. |
|---|
| Outcome | Around £362,000 of borrowing available on the same accounts, same year, same company. The only variable was which lender read the file. |
|---|
This single difference is the most valuable thing a broker knows about company directors. How self-employed income is assessed.
Case three · Buy to let
A landlord who earned too much
| Situation | Higher-rate taxpayer buying a £200,000 flat with a £150,000 loan. Achievable rent £950 a month. |
|---|
| The problem | At a 5.5% stress rate and the 145% cover a higher-rate taxpayer attracts, the lender needed £997 a month. The rent was £47 short. A basic-rate taxpayer would have passed comfortably. |
|---|
| What was done | Three options modelled: a larger deposit, a five-year fix (which several lenders stress more gently), or buying through a limited company at 125% cover. The company route also suited the client's longer-term tax position. |
|---|
| Outcome | Purchased through a special purpose vehicle at 125% cover, which the rent cleared with room to spare. A higher rate and more fees, offset by interest remaining a deductible expense. |
|---|
Nothing in that calculation involved the client's salary. Test a deal against the stress test.
Case four · Remortgage
Rolled onto the standard variable rate for seven months
| Situation | £218,000 outstanding, fixed rate ended the previous autumn, letter filed and forgotten. |
|---|
| The problem | Seven months on the lender's standard variable rate, roughly two points above what was available. On that balance the gap runs to about £360 a month. |
|---|
| What was done | The property had also risen in value and five years of capital had been repaid, so the automated valuation was challenged. Loan to value moved from an assumed 81% to 74%, crossing a rate band. |
|---|
| Outcome | Moved to a new lender in under four weeks with free legals and free valuation. A calendar reminder now sits six months before the new deal ends. |
|---|
The most expensive thing you can do with a mortgage is nothing. When to start a remortgage.
Case five · Adverse credit
A default from 2023 and four applications too many
| Situation | £44,000 income, £38,000 deposit, one satisfied default from three years earlier, and four mortgage applications made in six weeks. |
|---|
| The problem | The default itself was largely survivable at that age. The four hard searches were not - clustered applications read as distress and were closing doors that had been open at the start. |
|---|
| What was done | All three credit files pulled and checked. One entry turned out to be an error and was corrected. Then a wait, so the searches aged, and a single application to a lender that assesses cases rather than scoring them. |
|---|
| Outcome | Approved at 85% loan to value on a two-year fix, chosen deliberately with a short tie-in so the case can move back towards mainstream pricing once the record has aged further. |
|---|
Applying everywhere at once is the most expensive mistake in this whole subject. What is still possible with credit issues.