Hinckley and Rugby Building Society has updated its product and criteria, the details are below. These products are available through our direct to lender mortgage club so contact us for more information on how our club can support your business.
Using net profits and salary to support a self‑employed couple purchasing a new home
This week, we’re shining a spotlight on the flexibility of Income Flex for your self-employed clients. Below, we’ve shared a real-life approved case that demonstrates how our criteria can use net profits alongside salary to maximise affordability.
In this case, we were able to assess the most recent year’s accounts, supported by an accountant’s reference, confirming that the increased profitability reflected sustainable growth rather than a one-off uplift.
In case you’ve missed it, during January we introduced new Income Flex products up to 95% LTV and reduced rates across the range giving you even more competitive products for your clients.
Case Study
THE CHALLENGE
A self-employed couple wanted to let out their existing property and purchase a new home. Both applicants were 50% shareholders in their family butchers’ business. Following a business restructure, the company transitioned into online sales, resulting in a significant uplift in profits.
However, affordability could not be supported using the traditional approach of averaging the last two years’ income.
THE OPPORTUNITY
The uplift in income was driven by structural changes to the business rather than a one-off performance. To demonstrate sustainability, the most recent year’s accounts were supported by an accountant’s reference.
This allowed for a more flexible, common-sense approach to income assessment using net profit alongside salary.
OUR SOLUTION
Using our Income Flex criteria, we assessed the case using salary and net profits from the most recent year’s verified accounts, rather than relying on a two-year average or assessing income using salary and dividends. This allowed us to reflect the business’s current trading position and true affordability more accurately.
Case approved at 80% LTV with a 4.15% LTI.