When the Income Is Real But the Form Doesn't Have a Box for It

I see versions of this case more often than people might expect. The client isn't necessarily short of income or assets. The problem is that their financial profile doesn't fit neatly into a conventional lending category.

In this case, a high-net-worth international client approached us looking to purchase a holiday home in Europe. The client had substantial earnings, but a significant proportion of that income was contract-based and received at different points throughout the year.

On paper, the financial position was strong. In practice, the income structure presented a challenge.

Most conventional mortgage affordability models are built around predictable employment income: a regular salary arriving every month, supported by payslips and an employment contract. Contract-based earnings can look very different. Income may arrive seasonally or in larger payments throughout the year, even where there is an established history of substantial earnings.

Irregular income is not necessarily unreliable income. But it does need a lender prepared to understand how it is earned and assess its sustainability appropriately.

There was another complication. A significant proportion of the client's liquidity remained tied up in an existing residence that was being marketed for sale. Making the European purchase dependent on that sale completing first could have affected the client's preferred timeline.

We built the application around the client's actual financial circumstances rather than trying to force the case through a conventional salary-based model.

That meant presenting the history of contract-based earnings and supporting financial information in a way the lender could assess, while identifying an institution with experience underwriting high-net-worth international clients with non-standard income.

We subsequently structured a circa $1.5 million mortgage, representing approximately 75% LTV against a property valued at around $2 million. The facility was designed so that the proposed purchase was not dependent on the prior completion of the client's existing property sale.

I'm Islay Robinson, CEO and Founder of Enness Global. Over the years, I've worked with many clients whose income looks unusual to a conventional mortgage lender: entrepreneurs, senior executives, professionals receiving significant variable remuneration and individuals earning substantial contract-based income.

The common thread is that complex income does not automatically mean an impossible mortgage. Different lenders interpret the same financial profile in very different ways.

Sometimes the challenge isn't whether the income exists. It's finding the lender whose underwriting approach allows them to understand it.

If your income doesn't fit neatly into a standard mortgage application, the starting point is understanding how the wider lending market is likely to assess it.

Disclaimer

This article is provided for illustrative and informational purposes only and does not constitute financial, investment, tax or legal advice. Some examples may be based on multiple client scenarios or enquiries and do not necessarily represent completed transactions. Lending is subject to individual circumstances, lender criteria, valuation, underwriting and approval. Loan-to-value and other terms shown are specific to the circumstances of the case and should not be taken as indicative of terms available to other borrowers.

Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured against it.

Enness Global is a trading name of Enness Limited, a credit broker, not a lender. Enness Limited is authorised and regulated by the Financial Conduct Authority (FCA reference 565120). Certain international mortgage and lending activities may fall outside the scope of UK regulation.