Case study
How we helped a client remortgage his own main residence to buy a home for his brother.
Case summary:
Client type: Homeowner moving from self-employment into an employed role
Mortgage purpose: Remortgage to fund a property purchase for his brother to occupy
Property value: £650,000 — client’s existing home
Mortgage required: £500,000 at approximately 77% loan-to-value
Use of funds: Property purchase, associated fees and second-property Stamp Duty Land Tax
Income profile: New employment starting one month after the application, with four months’ probation
Affordability basis: Client’s own commitments and the running costs of both homes
Main challenge: Using income from a job that had not yet started
The client
Our client wanted to buy a home for his brother to live in, raising the necessary funds by remortgaging his own property.
He had recently left self-employment and accepted an employed position. His new role would not begin for another month and included a four-month probationary period.
The situation
The remortgage needed to raise enough money to cover the full purchase price of his brother’s home, together with the associated fees and second-property Stamp Duty Land Tax.
The borrowing would be secured against the client’s existing home, rather than the property being purchased.
Alongside the change in employment, the application needed to account for the financial commitment of maintaining two homes. The client’s new salary would need to support his own lifestyle and commitments as well as the running costs of the property his brother would occupy.
The employment challenge
The client had accepted a job offer, but had not yet started work or received his first salary payment.
His previous self-employed earnings did not represent his circumstances going forward. We therefore needed a lender willing to assess the application using the income from his new employment before its start date.
The four-month probationary period added another consideration. The lender needed to accept both the future start date and the terms of the new role, rather than requiring him to start work and complete probation before applying.
The affordability challenge
The proposed borrowing was a regulated residential mortgage, with the client responsible for the debt secured against his own home.
Affordability needed to extend beyond the new mortgage payment. His income also had to cover his existing expenditure and the additional running costs of his brother’s property.
The application therefore needed to present the ongoing cost of the arrangement clearly, allowing the lender to assess whether his new salary could support both households’ property costs alongside his own lifestyle.
The capital raising challenge
The amount required was greater than the purchase price alone.
Legal fees, other associated purchase costs and second-property Stamp Duty Land Tax all needed to be included in the funding requirement. Overlooking these would leave a shortfall despite raising enough to buy the property itself.
The lender also needed to accept the purpose of the capital raising: purchasing a separate home for a family member to occupy.
Our solution
We structured the remortgage around the complete purchase requirement, including the property price, associated fees and second-property Stamp Duty Land Tax.
The lending approach needed to accommodate income from the client’s accepted job offer, with the role due to start one month later and subject to four months’ probation.
We presented the employment arrangements alongside the intended use of the funds and the expenditure associated with both properties. This brought the income, capital raising and affordability requirements together within one application.
The assessment focused on whether the new salary could support the mortgage and the wider commitments the client would be taking on.
Our client’s outcome
The remortgage provided the funds required to purchase a home for his brother, including the associated costs of completing the transaction.
The arrangement allowed the client to use the equity in his own home to support a family member, with affordability considered against his new employment income and the ongoing costs of both properties.
Frequently asked questions.
Every client and every mortgage is different, but there are some questions we are asked regularly.
From affordability and deposits to complex income, expat mortgages and specialist property finance, our FAQs explain how different lenders may approach different circumstances.
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