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Case Profile
largemortgageloans.com were recently asked to find a solution for a couple who had purchased their main residence a year earlier, using the maximum loan they could obtain through high street lenders, and now required further funds to complete some improvements they had begun on the property.
Based on the clients’ income, there was no room to raise the additional capital based on high street lenders’ affordability assessments. Furthermore, as the refurbishment had already commenced, the property was uninhabitable and so the clients had moved into another flat owned in the wife’s sole name. Despite only having a small residential mortgage on it and considerable equity available, the clients were unable to raise the capital required on this property – again, due to affordability limitations. As the clients were also living in the second flat, a buy-to-let loan was not readily available either.
Solution
By assessing the clients’ circumstances and their plans – it was clear that they would be residing in the main property as soon as the refurbishment works were complete. On that basis, we put the case out to the wide range of specialist lenders and private banks in the largemortgageloans.com network.
Often the difference between a case succeeding or failing can be in the way it is presented, and to which institution. By emphasising the clients’ plan to relocate to the main residence once fully refurbished, we were able to raise a buy-to-let mortgage against the 2nd property – despite the clients living in it at the point of application. Not only could the lender facilitate the capital raise, they were able to add 12 months’ mortgage payments to the advance – helping to pass the affordability rules whilst residing in the flat.
Another complexity arose when the loan was deemed to be affordable only under both the husband and wife’s names, while adding the husband to the mortgage would incur a stamp duty liability.
To overcome this obstacle, we managed to obtain the loan on joint borrower/sole proprietor basis. A brilliant outcome for the clients and further proof of the value in having a good mortgage broker on side.
Deal Highlights
| Loan amount: | £200,000 (plus an £18,000 loan to service the mortgage payments) |
| Rate: | 4.25% |
| APRC: | Overall cost for comparison 4.6% APRC |
| Term: | 5 years |
| Type: | Interest only |
| Loan purpose: | Remortgage with capital raising |
| Lender's arrangement fee: | £2180, added to the loan |
| Early repayment charges: | 2% of amount repaid for 2 years |
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 4.60% APRC representative variable based on 5 years at 4.25% and lender’s arrangement fees of £4,360. 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. Changes in the exchange rate may increase the sterling equivalent of your debt.
