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Case Profile
Our client wanted to remortgage two Buy to Let properties with the objective of reducing the current high interest rate. However, finding a mortgage was a challenge, as the Buy to Let properties had been purchased via the client’s former trading company and the client had a low taxable income.
The two Buy to Let properties were purchased, with the proceeds from the sale of the client’s former business, in cash. The client later went on to remortgage these properties, but only found a mortgage option with a very high interest rate.
The challenge of this case was that most high street lenders are unwilling to lend on properties, on a Buy to Let basis, that have been bought through former trading limited companies. If the company had been a Special Purpose Vehicle, solely dedicated to the purchase of property, the case would have been simpler. In addition, the client’s taxable income was low, which most lenders would not be happy to take a view on the case.
Solution
Using our access to an extensive range of private bank contacts, we were able to arrange a bespoke remortgaging solution for the client. We sourced a lender who was prepared to accept the client’s future taxable income. The rental income they would receive going forward would be substantially higher, as any losses from it would be exhausted. In addition, the client is planning to draw a higher income from another business, which will also be used to service the new mortgage.
The client was happy with the solution and they were able to successfully remortgage both Buy to Let properties at a much lower rate.
Deal Highlights
| Loan amount: | £2,600,000 |
| Rate: | 2.62% (2.25% plus 3 month Libor (currently 0.37%)) |
| LTV: | 47% |
| APR: | Overall cost for comparison 2.62% APR representative variable |
| Term: | 10 years |
| Type: | Interest Only (with capital lump sum repayments) |
| Loan purpose: | Remortgage |
| Lender’s arrangement fee: | 1% of loan amount |
| Early repayment charges: | None |
Notes
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.
Please note that this specific deal may not be available to – or suitable for – all customers, dependent on their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This document may not contain all the information needed for customers to make a decision and they should seek advice.
Overall cost for comparison 2.62% APR representative variable based on 10 years at 2.62%. Lender’s arrangement fee of 1% of the loan amount. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage.
