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Case Profile
The clients wanted to purchase a new main residence; however, they were unable to use the income from the sale of their current property to purchase their new home. This complicating factor along with the client’s income structure meant a more tailored lending solution would be required.
They wished to purchase a new main residence and borrow on a regular mortgage basis. The clients had originally planned to upsize to the new property, but the sale fell through. As a result they required a short term cross charge loan on their current home, giving them time to find a new buyer. The total combined value across both properties was £4,402,000 and the initial total combined borrowing was £3,383,800; giving an LTV (Loan to Value) of 76%, which was problematic for most lenders.
The wife was employed and earning a regular income. The husband, however, was self-employed. His business had only been trading for one year, but it was clear that the business would generate a sustainable income. The client also has a proven track record of being a successful in his profession. Despite this, most lenders were not prepared to accept this income, as the business had only been trading for one year.
Solution
Through our extensive range of contacts in private banks we were able to provide the clients with a bespoke borrowing solution to meet all their requirements.
After taking care to evaluate every aspect of the client’s circumstances, we presented their case to a lender who was prepared to accept the relatively high LTV on day one. They also accepted the client’s income from his business.
They were able to refinance their current home on a cross charge loan basis and purchase their new home. The proceeds of the sale on the current home would be used to reduce the overall borrowing, once it had been made.
The clients were happy with this bespoke mortgage solution, and were able to purchase their new home.
Deal Highlights
| Loan amount: | Regular mortgage - £1,853,800 Short term loan - £1,530,000 |
| Rate: | Regular mortgage -1.49% plus base rate (currently 0.25%) = 1.74% Short term loan - 4.00% plus base rate (currently 0.25%) = 4.25% |
| LTV: | Total LTV on cross charge basis - 76% |
| APR: | Regular mortgage -3.13% APR representative variable Short term loan - 4.25% APR representative variable |
| Term: | Regular mortgage - 25 years Short term loan - 1 year |
| Type: | Interest only |
| Loan purpose: | Purchase new main residence and remortgage existing property |
| Lender’s arrangement fee: | Regular mortgage - 0.50% Short term loan - 1% |
| Early repayment charges: | None |
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 of regular mortgage 3.13% APR representative variable based on 25 years at 1.74%. Lender’s arrangement fees of 0.5% of loan amount. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
Overall cost for comparison of short term loan 4.24% APR representative variable based on 1 years at 4.25%. Lender’s arrangement fees of 1% of loan amount. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
largemortgageloans.com is a trading name of largemortgageloans.com Ltd. A fee of up to 1.17% of the mortgage amount is payable, of this 25% is payable on application and the remainder on completion, e.g. on a mortgage of £1,000,000 the fee would be £11,700 of which £2,925 would be payable on application. The precise amount will depend on your circumstances.
