Shawbrook’s Residential Mortgages team provides much-needed loan to consolidate customer’s credit

20 March 2017

£30k at a LTV of 63.55% for client with a variable income…

Second charge mortgages have a wide range of uses – in this case study, a second charge was perfect for an applicant with a variable income which fluctuated monthly. Working in a sales environment, the customer was looking to clear their unsecured debt and raise funds for home improvements.

Approaching their broker Phillips Clark and needing to raise £27k, the customer had a fixed rate on their mortgage with another lender, so it was not in their best interest to remortgage and they had only been in their current job for just over six months. With a varied income affected month-to-month by commission payments, a pragmatic lending approach was required to provide a positive customer outcome.

The Shawbrook Residential Mortgages team looked at the case on its merits, agreeing a further borrowing of £30k at a LTV of 63.55%. The customer was unable to produce a P60 due to only being in their current position for six months and, as stated, had a shifting monthly income. Despite this, the Shawbrook teams were pragmatic and analysed their previous three payslips. It was clear from the gross-to-date figures that the customer received substantial commission on a regular basis and, using the lowest income from the three payslips provided, Shawbrook felt comfortable in proceeding with the mortgage. The Shawbrook team used the lowest payslip to ensure that the customer could comfortably afford the loan should interest rates rise in future, demonstrating good sense for the customer’s benefit.

The broker, Andrew Watson from Phillips Clark, had the following to say:

“We approached Shawbrook’s Residential Mortgages team and were impressed from the off by their progressive, ‘can do’ attitude.

“The customer didn’t want to disturb the current low interest rate they had on their existing mortgage in order to raise the additional funds, and it was more cost effective to raise a smaller amount on a slightly higher rate than remortgage and have to repay ERCs. Shawbrook were open to this approach and understanding of the customer’s personal situation, offering interest rates and a product which suited their individual needs.

“The end result is a satisfied customer, with Shawbrook consolidating their monthly outgoings into one payment and reducing their outlay by £574 per month. The Shawbrook teams truly provide a service which is unrivalled by their peers.”

Maeve Ward, Managing Director of Shawbrook Residential Mortgages added:

“This case is a perfect example of the case-by-case lending decisions we make in the Residential Mortgages team. Rather than be put off by the client’s inability to produce a P60 or their fluctuating month-on-month income, we took a measured approach and were able to get comfortable with offering the £30k needed. The customer now has the loan they required without having to remortgage expensively, resulting in a positive outcome our teams can be proud of.”