A barrister approached us looking to remortgage his home after recently getting divorced from his now ex-wife.
Instead of splitting the equity in the house, the couple had agreed that the husband could have the house and he would remortgage it in his sole name, and pay the agreed settlement to his ex-wife using money in his savings.
The client had originally approached his existing lender directly for a remortgage on interest-only terms but had been declined due to earning insufficient income on his own to pass their affordability criteria.
The client is a high net worth individual and, worried that he would be unable to obtain a mortgage by going directly to another lender, he approached us for help.
We took the case to an intermediary-only lender, which allows borrowing up to 5.5 times income (unlike the 4.5 x maximum set by the client’s original lender).
We spoke with the underwriting team and provided evidence of the client’s income and assets. To support the case we were also able to provide evidence that the client’s student loan and car loan had recently been fully repaid.
The following favourable terms were offered saving the client £904 pcm in mortgage payments:
Property value: £800,000
Loan amount: £660,000
Rate: 1.38% 2 Year Fixed
Term: 30 years interest only
Mortgage payment: £2,296pcm
Previous monthly payment: £3,200pcm
Lender arrangement fee: £1,995
Please note. There are no longer any residential mortgage lenders which will allow applicants to borrow up to 5.5 times their salary. However, we do still have access to lenders, which will go above the standard 4.5 times.
5th September 2017