Self-Build Arrears Case | Vernon Case of the Week

28th May 2024

Applicants were looking to build a new property on land they already owned. The land was purchased unencumbered and was bought from the equity in their previous property.

The loan was declined elsewhere due to the following:

  • The construction of the property was non-standard with timber cladding and a thatched roof.

  • One applicant is full time employed and the other retired. The second applicant had recently requested that their SIPP provider increase the SIPP drawdown to cover additional costs for the build. The additional drawdown from the SIPP meant it would be extinguished 2 months before suggested ONS life expectancy figures.

Our flexible lending policy empowered our underwriters to approve this case by:

  • Despite being non-standard construction, following valuation, the value of the property was at an acceptable level and that the property could be sold to cover the mortgage if required.

  • The increased drawdown of the SIPP was acceptable as they intended to revisit this decision once they started receiving state pension later in the year. This meant the SIPP would last to the projected ONS life expectancy.

The property equity was over £900k and would increase over time on a capital & interest mortgage. Having satisfied the above, we were happy to proceed with this mortgage.

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