Hodge Resi case study: Nia and Aaron

Nia and Aaron, both 38, are a married couple with three young primary aged children. Nia works three days a week in a busy GP practice, sometimes working extra hours though the NHS staff Bank to top up their joint income. Aaron runs a bespoke furniture business, employing two skilled carpenters. Following advice from his accountant, Aaron transitioned the company from sole trade to Limited company just ten months ago.

To purchase their dream home, they were using from the house sale as a deposit but retaining some funds for property renovations, specifically a new kitchen extension.

Challenges

Affordability: Nia and Aaron found they were falling short of affordability requirements necessitating a higher Loan-to-Income (LTI) ratio even when taking into account both incomes.

To access higher LTI’s many mortgage products require both applicants to be first time buyers or work as a professional which excludes nursing, so Nia and Aaron were not able to take advantage of this feature with some other lenders.

They were also coming up against income assessment challenges as Nia needed a lender who would take into account 100% of the bank income from extra hours worked and Aaron, needed a lender who would consider change of trading style with less than two years of Limited company accounts.

Solution

The Hodge Resi Mortgage: Our Resi mortgage provided an ideal solution for Nia and Aaron. When we assess affordability, we look at the holistic picture for income calculations. This meant we took into account Nia’s salary plus 100% of the average of six months’ bank income from extra work. For Aaron, we were able to used his SA302s from the last two years and an accountant’s reference for income projections, confirming his projected Limited company salary and dividends, as well as the last year’s net profit from the self-assessment tax return. The established business had a strong performance and substantial orders confirmed by the accountant allowed for confidence in using last year’s net profit for affordability calculations

To further maximise affordability and repayments, Nia and Aaron took a 30 year term, taking them up to age 68, their elected retirement age.

This case study demonstrates how at Hodge, we take a comprehensive approach to addressing the financial needs and constraints of applicants. Even where they are looking to upscale their home and manage affordability, we’re here to help them leverage their professional income so they can climb the career ladder and the property ladder at the same time.

For intermediaries only. This is a hypothetical example. It’s not an indication of likely or possible benefits or what we think will happen in the future. It’s not advice of a recommendation from us.