A newly married couple approached us looking to purchase their first home together – a 4-bed detached house in Kent.
Both applicants already own their own homes respectively and were not looking to sell. One of the applicants was going to let her children continue to live in her previous home and the other could not sell up due to being party to a joint mortgage.
Even though we see this scenario on a weekly basis lenders are still cautious about lending to individuals who are already tied into other residential mortgages.
The lender needs to be sure that the borrower can afford to make the repayments on both mortgages and cover any running costs.
To make matters more confusing one of the applicants is still in a probationary period at work. The couple were also keen to secure an interest only mortgage – something residential lenders tend to steer clear of as they don’t like the repayment vehicle being the applicants main residence.
We decided to take this case to one of the high-street lenders.
After explaining that the couple plan to downsize once the term is up, the lender agreed that there would be enough equity left in the property to use it to repay the loan.
The lender was also happy with one of the applicants probationary status as they had proof of continuous employment in the same field for years.
Here are the details of the deal:
Property value: £550,000
Loan amount: £230,000
Rate: 1.59% 2 year fixed
Term: 5 years interest only
Lender arrangement fee: £995
Mortgage payment: £306 pcm
Consultant: Beckie Pepperrell, 01732 471602