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Our Case Studies £990,000 mortgage for a client with complex income structure, nearing retirement

£990,000 mortgage for a client with complex income structure, nearing retirement

Need a large mortgage but have a complex income structure? We have the banking contacts to provide a tailored solution where other lenders may not be able to help. To discuss this or any other large or complex mortgage case, please contact us on 020 7519 4984 or email us.

Case profile

Our clients were looking to arrange a mortgage for their new home valued at £1.78 million. However, due to the age of one of the applicants, their low income and the speed at which they required the finance sourcing a mortgage created a challenge.

Our clients were selling their current home to move into a larger, new build property. They had already exchanged contracts on the new property, however, at the last minute their bank had pulled out of financing the purchase. As a result, they needed to arrange a new mortgage very quickly to meet completion deadlines and avoid substantial penalties.

Their income presented a challenge as it was not high enough to meet most lender’s affordability criteria. They jointly own and run care homes, which they hold through a complex limited company structure. Much of the profit they made from their companies was retained in their businesses, and not drawn as a salary or dividends.

The developers of the new property had agreed to pay £90,000 of the total stamp duty due on the property, as a purchase incentive. However, as this amount was over 5% of the purchase price, some lenders would not be happy to accept this.

They also required an interest-only mortgage on a short term of just 8 years, which would end before the retirement of one of the applicants. They planned to downsize at the end of the term to service the loan. However, the LTV of the mortgage was over 50% and many lenders would not be happy to accept this as a repayment method.

They had approached their own mortgage broker. However, they were unable to assist and so contacted us to arrange their mortgage.

Solution

Utilising our extensive experience in arranging large and complex mortgages we were able to arrange the mortgage our clients required to purchase their new home.

Through our relationships with an extensive range of banks, we sourced a specialist retail lender who would accept a builder’s incentive. We also negotiated with the lender to enable our clients to use the retained profits from their business to demonstrate their affordability. In addition, we also arranged an interest-only mortgage above 50% LTV and the lender accepted downsizing as the repayment method.

As well as securing our client’s low rates and fees, we were able to process an application through to completion very quickly.

Our clients were delighted with the outcome as they secured the property with a great mortgage deal and could complete on time.

Deal Highlights

Loan amount:£990,000
Rate:1.49%
LTV:56%
APR:4.10% APR
Term:8 years
Type:Interest Only
Loan purpose:Purchase
Lender’s arrangement fee:£1,499
Early repayment charges:3% in year 1, 2% in year 2 of the loan amount, none thereafter

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 4.10%APR representative variable based on 8 years at 1.49% and lender’s arrangement fees of £1,499. 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.

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This Month’s Top Fixed Rate

Fixed rate
Initial rate: 1.35%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.46%

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This Month’s Top Variable Rate

Variable rate
Initial rate: 0.97%

Period: 2 years

Rate will revert to a variable rate, currently 4.99% thereafter
The overall cost for comparison is 4.37%

Get This Rate

Some of this month's top interest rates are listed above; the actual rate will depend on your circumstances. Please note that this information does not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration on 020 7519 4900. The rate displayed may become out of date at short notice.

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