• 61-year-old, Carol, wanted to buy her ex-husbands share of their home and let the property out to tenants
  • She needed a lender that would lend to a first-time landlord
  • Carol also wanted to raise enough capital to put towards a new home to live in
  • She was a day rate contractor and had failed a credit score with two high street banks
Case type: Complex income Self-employed


61-year-old divorcee, Carol Turner-Gray, lived in Southampton in a home owned by herself and her ex-husband, Lee. She worked as a day rate contractor as an IT Consultant.

Carol wanted to remortgage her ex-marital home to buy her ex-husband's share of the house. She would then let the property out to tenants.

She also wanted to buy a new home using capital raised through the remortgage, and was keen on completing both the remortgage and the residential purchase with the same lender.

The issues

There were several details that made this case interesting. Carol had already failed a credit score with two high street banks, with no easily identifiable reason why on her credit record.

In order to release enough equity to put down a deposit on her new home, and have additional funds to buy Lee's share of the house, she needed an 80% LTV mortgage. 

However, many let to buy lenders restrict capital raising for use as the deposit on the ongoing residential purchase. 

Not only did she need a lender that would allow capital raising for other purposes, but also one that would lend to a first-time landlord.

For her residential purchase, as the term took her beyond her state retirement age, she needed a lender that would consider her employment income beyond her state retirement age, as well as her pension income.

In addition, she wanted one lender that was able to offer the let to buy remortgage and the ongoing residential purchase.

Luke Atkinson of The Mortgage Hut, says:

"This was a good example of a case that needed a lender to take a common-sense approach. There were lots of factors to consider, but there was also a plausible story to explain the client's circumstances and Pepper Money's underwriters were able to deliver a solution that met all of her requirements."

The solution

Mortgage Adviser, Luke Atkinson of The Mortgage Hut, knew this was a case for a specialist lender. 

Our underwriters were able to offer Carol the let to buy remortgage that she needed to put down a deposit to purchase a new home and buy her ex-husband's share of the house. We were also able to offer her a mortgage on her new home. 

The let to buy mortgage was a 5 year fixed rate, with a rental calculation of 140% x the pay rate. 

For the onward residential purchase, our underwriters considered Carol's occupation and were happy that this would be sustainable beyond her state retirement age.

In addition, as Carol was already drawing a public sector pension, we used 100% of this income for the affordability calculation. This enabled her to demonstrate the affordability she needed to buy the home she wanted and retain ownership of her ex-marital property as an investment.

This case study is based on criteria in effect at the time this case was submitted and reviewed by Pepper Money. We reserve the right to change or amend our criteria at any time. All our stories are based on real cases but the names have been changed.


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