Are you looking to secure a mortgage but have some complex holdbacks that are proving difficult to overcome? We have the banking contacts to provide a tailored solution where other lenders may not be able to help. To discuss this or any other large or complex mortgage case, please contact us on 020 7519 4984 or email us.
Case profile
Largemortgageloans.com was approached by a couple who had found their dream family home but had been let down by their previous broker who was unable to secure them a mortgage.
The husband and wife pairing were 50% shareholders each in a business they started in 2012. While the company had gone from strength to strength, the most recent three years’ accounts showed fluctuating net profits as the couple had reinvested heavily and changed their business model in the second year, dampening the net profit figure in that year. This posed a problem as lenders will typically want to see a two or three year business history with income either stable or consistently rising.
When we were first contacted by the clients, they had been looking to sell their existing home in East London, while simultaneously purchasing the new property in Belsize Park for an agreed purchase price of £1.05m, of which they wanted to borrow £789,000.
Solution
After analysing the clients’ overall circumstances and liaising with the clients’ accountants to better understand the health of the business, our broker Devraj Ray was able to pinpoint a lender who would look at gross profit figures, as well as take a logical view on the fluctuating income figures – and were able to evidence the reason for the dipping year 2 profits as sound financial planning and business management.
Eventually, we secured the full requested loan amount for the clients, on an interest-only basis at a rate of 2.04% fixed for two years. This demonstrates the importance of a well-packaged case being presented to the right lender.
While the clients were overjoyed at finally being able to proceed with their purchase – we took one further step and were able to help them keep their existing property by refinancing it to a buy-to-let mortgage. As they already had significant equity in the property, the couple were able to release capital – which they had initially wanted to do but felt was out of reach. With the new BTL mortgage in place, the asset remains under their ownership and is now generating an extra £1,400 per month in income for the family.
| Loan amount 1: Loan amount 2: | £159,000 £630,000 |
| Rate 1/2: | 2 Year fixed rate 2.04% |
| Loan To Value 1: Loan To Value 2: | 1.5% 60% |
| Term 1/2: | 25 Years |
| Type 1: Type 2: | Capital repayment Interest only |
| Loan purpose 1: Loan purpose 2: | Remortgage Purchase |
| Lenders arrangement fee 1/2: | 0.3% of loan amount |
| Early repayment charges 1/2: | 3.0% of total loan amount in Year 1, 2.0% in Year 2 |
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 4.50 % APRC representative variable based on 24 payments at a fixed rate of 2.04% followed by 276 payments at the lenders standard variable rate, currently 4.74%. Because all, or part of, the mortgage is currently, or will revert to, a variable interest rate mortgage, the actual APRC could be different from this APRC and the payments could increase, if the interest rate of the loan changes. For example, if the interest rate rose to 9.99% the APRC could increase to 10.60%. 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.
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