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Our client, a recently self-employed entrepreneur, needed to arrange a million pound interest only remortgage quickly. He wanted to raise capital in order to purchase another property for cash.
Our client could provide only 1 year’s full set of accounts as proof of income and this meant that he could not pass mainstream lenders’ affordability tests for the increased loan. Also, as there was goodwill in the accounts, it meant that high street banks could not assist as they do not accept or recognise this form of income.
The client’s financial affairs, especially his self-employed status and his limited trading period, meant that we needed to present the case correctly to the right private bank. Using our experience of the 44 private banks and lenders that we deal with, we quickly found a bank which was willing to add back the goodwill, accept 1 year’s accounts and lend £1.19 million on an interest-only basis.
|Loan amount:||£1.19 million (70% LTV on overall property valuation of £1.7 million)|
|Rate:||4.89% 2 year fixed rate|
|APR:||Overall cost for comparison 5.5% APR representative variable|
|Loan purpose:||Remortgage – capital raising|
|Lender’s arrangement fee:||1% of loan amount|
|Early repayment charges:||2% for 2 years from completion|
Your home may be repossessed if you do not keep up repayments on your mortgage.
This case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.
Overall cost for comparison 5.5% APR representative variable based on 2 years at 4.89%, reverting to 5.39% variable for the remainder of the 15 year term. Lender’s arrangement fees of 1% x £1.19 million (£11,900), free legal services and valuation fees of £1,500. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
Largemortgageloans.com is a trading name of Largemortgageloans.com Ltd. A fee of up to 1% of the mortgage amount is payable, of this 25% is payable on application and the remainder on completion, e.g. on a mortgage of £100,000 the fee would be £1,000 of which £250 would be payable on application. The precise amount will depend on your circumstances.