Jenny is 23 and is in the early stages of her career as an HR Manager with a multinational company which employs much of the local workforce. Her income is currently £22k but she is part of a graduate scheme which guarantees further rises and she expects to be earning around £30k within the next 3 or 4 years. Her chosen career provides scope for further progression beyond that in the future and the company offers a clear pathway to promotion for high achievers.
Jenny has student debt and a car loan of £215 a month, but she has a good credit file with no issues. She also has a 10% deposit which is partly an inheritance from her grandparents and is partly a gift from her mum. She hasn’t really saved any deposit herself, but she has saved enough to cover the fees and moving costs that she will incur when she buys her first home.
Jenny wants to buy a property for £150k and would like to borrow £135k over 20 years. This is shorter than the term many first-time buyers borrow over as she is keen to build equity so that she can climb the property ladder further down the line. However, she's struggling with affordability criteria with the lenders she's looked at directly, despite the fact that she has good prospects and a supportive family.
Fortunately, Jenny's mother has used a helpful broker in the past and so turns to her for help. She's quick to advise that although it would probably not be possible for Jenny to obtain this mortgage by herself, her mother is able to assist using the Furness Joint Borrower-Sole Owner scheme. Mum (Christine) is 53 and earns £51k a year working for a local authority as a Senior Housing Officer. She has £15k remaining on her own mortgage, a car loan of £230 a month and a small amount outstanding on a couple of store cards.
As the mortgage term will extend beyond Christine’s expected retirement date, as a responsible lender - Furness needs to ensure that she has enough pension provision after this point. Jenny may well have taken on the mortgage solely in her own name long before then but Furness will ensure that the mortgage is affordable throughout the term.
By adding together Jenny and Christine’s incomes, the mortgage application easily passes the Furness affordability assessment even after their financial commitments are included. To ensure that everyone understands what they are entering into, Jenny and Christine will be required to receive independent legal advice during the application process.
If you have a client in a similar situation, or want to talk in general terms around our products and criteria then speak to your Business Development Manager today
All our case studies are based on real cases but the names have been changed and stock images have been used to protect confidentiality.