As an entrepreneur, there are many factors which can affect your lending ability. Often income is more complex than purely drawing a salary, and you need to find a lender who will take a holistic approach to your financial circumstances in order to meet your needs.
Case profile
We recently worked with a client who faced a lending challenge that we see on a regular basis at largemortgageloans.com. Although they owned a successful business, the client’s income had fluctuated over recent years because they had made a choice to take a minimal level of income and instead invest all the capital they could in their business.
We needed to find a lender who would look at the overall earnings of the business, not just the client’s individual historical income levels. An additional challenge was levied as the client was looking for 85% loan to value (LTV) on a mortgage over £2million. Without the right assurances in place, this can be seen as a stretch too far for many lenders.
Solution
We were able to highlight a private bank. We approached the team there with the client’s overarching financial position, taking into account the business performance as a whole, rather than just the client’s individual income. Armed with this information and experience in presenting and negotiating tailored client solutions, he was able to secure the lending required.
| Loan amount: | £2,210,000 |
| Rate: | 2.49% fixed for 5 years |
| Loan To Value: | 85% |
| APRC: | Overall cost for comparison 3.50% APRC representative variable |
| Term: | 25 Years |
| Type: | Interest only & Repayment |
| Loan purpose: | Purchase |
| Lenders arrangement fee: | 0.5% of loan amount |
| Early repayment charge: | 5% of the outstanding loan amount in Year 1, reducing by 1% year on year for 5 years |
Overall cost for comparison 3.50% APRC representative variable based on 58 monthly payments at a fixed rate of 2.49% followed by 241 monthly payments at the lenders variable rate, currently 3.75%. Total amount to be repaid £3,934,347.60. As the mortgage rate is not fixed for the duration of the loan this amount is illustrative and may be vary in particular as a result of variations in interest rate.
Because part of your loan is a variable interest rate loan, the actual APRC could be different from this APRC if the interest rate for your loan changes. For example, if the interest rate rose to 9.00%, the APRC could increase to 6.90%. The actual rate available will depend upon individual circumstances and may not be available to everyone. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
