Some mortgage cases sit in the middle. Not fully residential. Not fully commercial. The kind of case that needs more than a quick yes or no. It needs a closer look.
The Challenge: A Mixed-Use Property with Multiple Income Streams
A broker brought us a case on behalf of clients looking to buy a mixed-use property set across three acres. It included their future home, a holiday let, and a well-established kennel business. The clients planned to keep their day jobs while continuing to run the business.
At first glance, this case had a lot going on. There were multiple property uses, different income sources, and a mix of repayment plans. While some lenders may have stepped away due to the complexity, we took time to understand the full picture.
Assessing Daily Use and Income Sources
The property had commercial features, but more than 40 per cent of it was used as a home. This meant it met our residential lending criteria. The holiday let had generated £34,000 in the past year, and we took a small proportion of this income into account to support the application. Although this income was unverified, we reviewed projected income across high, medium, and low scenarios. We based our assessment on a 30-week average to provide a fair and stable view of future income.
Affordability: A Balanced, Manual Assessment
Both applicants were in full-time employment, so we based affordability mainly on their salaries. One applicant had a strong and consistent record of overtime, which we included in full. We also factored in half of their child benefit, allowed for childcare costs, and included part of the projected income from the holiday let. This approach provided a realistic and well-founded view of affordability.
The income multiple came to 6.10. While this figure is on the higher side, it was reasonable given the full context. Although 6.10 may be above the lending criteria used by many high street lenders, we do not apply income multiple restrictions, and our lending is based on a full affordability assessment. We also used ONS living cost data to support our calculations. Credit checks were clear, and the deposit was sourced from the sale of their current home.
The loan was structured at 75 per cent loan-to-value (LTV). We also accepted earned income to age 75, which supported the longer-term repayment strategy and provided the applicants with greater flexibility.
Tailored Lending Structure with Exit Strategy
We structured the mortgage on a part-repayment and part interest-only basis. For the interest-only portion, the applicants planned to downsize in future. They would retain £210,000 in equity within the property. The broker provided examples of nearby, lower-cost homes to show that this plan was achievable.
Where Manual Underwriting Makes the Difference
Our manual approach allowed us to look at each part of the case in detail. We considered the steady income from employment, the realistic business income, and the future repayment route. The case was reviewed as part of our daily review process, and the team agreed the structure was sound.
The Outcome
The clients successfully bought the property, continued running the business, and put a clear long-term repayment plan in place. The figures added up. The story made sense. And the decision worked well for both the clients and the broker.
Broker Perspective
“My clients were referred to us as they’d been told their dream property, a large, detached house with kennels and cattery, was totally out of reach by other brokers. I was fairly pessimistic too, but knew The Stafford are the ‘go to’ lender for unusual properties. The underwriting was pragmatic and found solutions when other lenders may have simply declined. We were able to factor in projected holiday let income and restructure to a part and part interest only mortgage to help them keep payments affordable. The clients were amazed and delighted to receive their mortgage offer and a longed-for change in lifestyle has been made possible!”
Simon Deeming, Mortgage Style
Why It Pays to Look Beyond the Numbers
Some mortgage cases can’t be judged by numbers alone. They need thought and attention. Our manual process gives us the space to understand how the property, the income, and the future plan fit together. It means we can make lending decisions that reflect real life.
Got a complex case? Let’s talk.
We support mixed-use, layered income, and interest-only with real-life affordability in mind.
Contact your BDM or submit a DIP today through our Intermediary Portal.
