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Case Profile
At largemortgageloans.com, we find mortgages for a variety of specialist circumstances, often finding solutions where other brokers can’t. One area of our expertise is in securing mortgages based on spousal support – sometimes referred to as family or child maintenance payments. This is not a standard income stream and therefore requires a bespoke approach and network of contacts to find a solution which will offer both the lender and the mortgage holder the security they require.
Our client was a single, divorced mother who was buying one home and selling another simultaneously. The majority of her income came from spousal support payments, with a small portion coming from a buy to let property. A court order meant the client would be receiving family maintenance payments for many years. Our client, therefore, wanted to secure a mortgage based on spousal maintenance payments, and also release equity from a buy to let investment to buy a new home. Therefore, two new mortgages would be required to secure her dream £1.1 million, four-bedroom Chelsea home.
The case had further complexities because our client’s spousal maintenance payments were due to decrease in the coming months (although they would continue to increase by RPI every year). When the client approached largemortgageloans.com, she had been let down by another broker and was therefore very anxious about the process and the time which had already been lost. Therefore, it was vital our team acted quickly and decisively to secure the required lending.
Solution
Our team’s dynamic approach secured our client a 10-year, interest-only mortgage of £320,000 for her main residence. The deal included the flexibility of overpayments and the option to pay off the mortgage after two years, which is in line with our client’s proposed future plans. Our team found a lender who took a positive view of the situation because the loan to value (LTV) ratio on the property was only 30%. Therefore they assessed the risk as obsolete, and we were able to secure the mortgage.
Additionally, our team secured a new interest-only, 25 year buy to let mortgage of £276,000. Although the overall debt was increased, we were able to secure a more competitive interest rate, lowering the overall payments. The outcome was a happy client, looking forward to the security of enjoying a long-term, family home.
Deal Highlights
| Residential Purchase loan amount: | New mortgage against the main residence of £320,000 |
| Buy to let re-mortgage loan amount: | New buy to let mortgage of £276,000 |
| Residential Purchase Rate: | 2.99% variable rate |
| Buy to let re-mortgage Rate: | 2.64% 5 years fixed rate |
| Residential Purchase LTV: | 28% |
| Buy to let re-mortgage LTV: | 75% |
| Residential Purchase APR: | 3.20% |
| Buy to let re-mortgage APR: | 4.10% |
| Residential Purchase Term: | 10 years |
| Buy to let re-mortgage Term: | 25 years |
| Type: | Interest only |
| Type: | Interest only |
| Loan purpose: | Purchase (and sale of existing residential) |
| Loan purpose: | Buy to let Remortgage |
| Residential Purchase Lender’s arrangement fee: | 1% of the loan amount |
| Buy to let re-mortgage Lender’s arrangement fee: | £1,995 |
| Residential Purchase early repayment charges: | 2% of the loan amount if repaid in full within 2 years |
| Buy to let re-mortgage early repayment charges: | Up to 6% if repaid in full within year 1, reducing 1 percentage point to 2% in year 5. |
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 for the purchase is 3.20% APRC representative variable based on 120 payments at a variable rate of 2.99% and for the BTL re-mortgage is 4.10% APRC based on 60 payments at a fixed rate of 2.64% followed by SVR of 4.49% for the remainder of the term. This APRC is calculated using an assumption regarding the interest rate. Because this case has a variable interest rate, the actual APRC could be different from this. For example if the interest rate rose to 10.00%, the APRC could increase to 10.7%. 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.
