Self-Employed Applicant with Fluctuation in Income

David, an experienced self-employed graphic designer and brand agency owner based in Felixstowe, wanted to relocate closer to the coast to buy a larger detached family home. He had his eye on a stunning property valued at £460,000. Having built up equity from his previous flat sale and added to his savings, David had a healthy 25% deposit of £115,000 ready to deploy. His goal was to secure a mortgage of £345,000 to cover the rest of the purchase price.

The Challenge

As is common for many business owners, David’s income was not completely linear. While his business had bounced back dramatically, generating a net profit of £95,000 in the most recent tax year, the year prior had been a transition phase. Due to major office restructuring and a conscious decision to reinvest profits into new hardware and staffing, his net profit for that previous year was just £38,000. When David approached high-street banks, they insisted on averaging his net profits over the last two or three years. This averaging method put his calculated income at roughly £66,500, which severely limited his maximum borrowing capacity to around £299,000—well short of the £345,000 he required to buy the family home.

The IMC Solution

David walked into our High Street branch in Felixstowe, where he met with our specialist self-employed mortgage adviser. We understood that his business restructuring was a sign of growth, not failure. We worked hand-in-hand with David’s accountant to gather detailed business bank statements, a projection for the upcoming year, and proof of signed, high-value client contracts that demonstrated his £95,000 net profit was his new baseline.

Our adviser used our deep industry connections to target a specialist lender known for their flexible underwriting. Rather than averaging his accounts, this lender agreed to assess David’s affordability solely on his most recent year’s net profit. We packaged the case thoroughly, writing a detailed cover letter to the underwriters that explained the temporary dip in profits during the restructure and highlighted the business’s current financial strength.

The Outcome

• The Result: David was approved for a 2-year fixed-rate mortgage of £345,000 at 4.35%, with monthly payments of £1,716. By opting for a 2-year fix, David planned to review his options once his business registered another high-performing trading year, potentially securing an even lower rate in the future.
• Client Feedback: “Getting a mortgage when you are self-employed can make you feel like a second-class citizen with high-street banks. The team at IMC Felixstowe understood my accounts straight away and presented my business in the best light. They secured the exact loan amount I needed to get my family our dream home by the sea.”