We were approached by a married couple who run a successful security services firm, wishing to borrow £1.52 million to purchase a new home in North East London. This amount represented 80% of the property's purchase price and there are not many lenders that will offer this level of loan to value on such an expensive property.
There were two other challenges for us to overcome, if we were to find a suitable mortgage for our clients:
- Despite a good level of earnings, the couple keep much of their income in the business as retained profits. So, to achieve the loan our clients needed, we had to find a lender that would base its affordability calculation on salary plus profits, rather than salary plus dividends which is more common amongst mortgage lenders.
- The husband has a large car finance loan in his personal name, although the monthly payments are made by the business. This meant that we needed a lender that underwrites applications manually, as a computer was unlikely to understand the intricacies of the couple's complex financial arrangements.
We identified a couple of banks which, we felt, could meet the clients' needs. The couple then selected one of them based on its competitive two year fixed rate.
We submitted an application on the couple's behalf with documents to explain their circumstances and support their case. We then worked with underwriters to ensure that they clearly understood our clients' complex financial arrangements and a formal mortgage offer was duly issued. Here are the details of the deal:
Property value: £1.9m
Loan amount: £1.52m
Rate: 1.79% 2 year fixed
Term: 22 years capital and interest
Mortgage payment: £6,980 pcm
Lender arrangement fee: £1,999 added to the loan
Consultant: Charlie London, 01732 471604
If you're looking to make a similar purchase and need help with finance, you can call me on the number above or feel free to use the main hotline: 0345 345 6788.
19th September 2017