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Our clients were a couple in their early fifties, with a mortgage of £1 million and around £500,000 income per annum via a Venture Capital Trust; projected income for next year is £1 million+. They were looking to borrow £1.6 million; £1 million to replace the existing mortgage and £600,000 to finish building their main residence.
Traditional high street lenders were unwilling to lend the amount required based on the fact that income from the VCT had been lower in previous years because it was set up only 4 years ago.
The clients contacted largemortgageloans.com. We met with them immediately and arranged a meeting with a private bank, who were comfortable with the likely income from the VCT, having valued the property at £3 million. £1.6 million was made available, provided the clients discussed transferring other assets. The rate agreed was LIBOR (currently 0.97%) plus 6.5% during 12 month development period, reverting to LIBOR plus 3.5% for 4 years, once the property has been finished.
|Loan amount:||£1.6 million (53% LTV on current valuation of £3 million)|
|Rate:||LIBOR plus 6.5%¹ variable rate (7.47% pay rate) for 1 year, reverting to LIBOR plus 3.5%¹ variable rate (4.47% pay rate) for 4 years|
|APR:||5.6%2 (the overall cost for comparison)|
|Loan purpose:||Remortgage of residence, including capital raising for development|
|Lender’s arrangement fee:||1% of loan amount|
|Early repayment charges:||None|
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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.
¹ 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 The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it.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.
2 APR (the overall cost for comparison) calculation based on 1 year at 7.47%, 4 years at 4.47%, with arrangement fees of 1% x £1.6 million (£16,000) and legal and valuation fees of £5,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.