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The clients, a married couple and a friend, wished to purchase a country estate as a main residence and equestrian training centre, with stables. However, due to the mixed use of the property, the joint borrowing and the type of mortgage required, finding a lender was a challenge.
The property was to be the new home of the married couple (who previously lived abroad), and a second home for their friend. It is also the new home to their horses and an equestrian training centre. The clients and their existing broker had approached many lenders, without success.
The challenges were numerous. The fact that it was a mixed-use property with large acreage, and that they needed all three incomes (mostly from overseas) made finding an appropriate lender difficult. They required an interest-only mortgage, at 55% loan to value, with the planned repayment being the future sale of investments. They also needed an offer very quickly; to exchange contracts before the vendor put the property back on the market. They could place no Assets Under Management (AUM), which also reduced the pool of lenders from whom they could borrow.
We took the time to understand the clients’ overall financial position, the benefits of the property to all parties, their long-term plans and used their borrowing priorities to dovetail these. We established that the track record of both investment and employment income was robust, and the ongoing affordability would be appropriate. We also needed to find a lender who would accept the proposal straight away: If we lost time on false starts the client could potentially miss their opportunity to purchase the property.
Using our extensive knowledge of banks’ lending criteria and appetite for lending, we sourced an appropriate private bank. The bank can lend on unusual properties and take into account overseas income in foreign currencies, including that from investment portfolios.
We supplied a full initial credit proposal pack with supporting documents to the carefully selected private bank, which was agreed quickly. The comprehensive proposal we provided meant it took only four working days, from taking the clients to meet the bank, to getting the mortgage approved and offered.
This allowed them to exchange contracts in time; the vendor did not need to look for alternative buyers, and our clients secured the home of their dreams.
|Rate:||2.60% base rate tracker for 5 years, reverting to standard variable rate, currently 4.25%|
|APR:||Overall cost for comparison 3.90% APR representative variable|
|Lender’s arrangement fee:||1% of the loan amount|
|Early repayment charges:||1% of the loan amount for the first 5 years|
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 3.90%APR representative variable based on 15 years at 2.60%. Lender’s arrangement fees 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. You may have to pay an early repayment charge to your existing lender if you re-mortgage.