Discover how our first-time buyer client purchased her dream semi-detached home from her landlord with no deposit.
At a glance:
- A first-time buyer looking to purchase her rented property
- Our client is self-employed with 2 years of company accounts
- The client had no cash deposit to put down
The Case:
Our client approached us looking to purchase the semi-detached property she currently rents. Having lived in it since 2017, she had made it her home and had dreamed of owning it. The client was self-employed and had set up her Locum contractor business just over 2 years ago.
Whilst the landlord was happy to sell the property to their long-standing tenant, the main challenge with this case was that our client had no deposit to put down.
The Challenge:
The landlord, an existing MFB client, was open to selling the property to their tenant at a discounted price. The property’s value was £168,000, so the landlord confirmed they were happy to sell at a 10% discount of £151,200.
Despite this generous concession, we still had to find a lender happy to lend 100% of the discounted purchase price, with the landlord's 10% concession as security. The fact that the client had lived in the property for over 12 months meant we had a few lenders to choose from.
Furthermore, to maximise how much our client could borrow, we needed to find a lender able to assess the affordability based on invoices rather than the latest two years' tax calculations.
Given the client’s experience in their field, we knew that it would be best to approach a lender who specialised in offering to contractors. Our established relationship with the lender’s business development manager meant we were able to have a discussion early on in the process, and they confirmed they were happy to work off the latest 3 months’ invoices.
Having found the right lender to suit our client's needs, we managed to secure the full loan amount, and the case was offered within 2 weeks. What’s more, the lender reduced its rates shortly after we received the offer, and we managed to move our client onto a much lower rate, saving them just under £1,000 over a 2-year period.
The Finance:
Property value: £168000
Loan amount: £151,200
LTV: 90%
Rate: 5.59% 2-year fixed*
Term: 30 years, capital and interest
Monthly mortgage payment: £866.44
Lender arrangement fee: None
*Rate as at June 2024
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