A married couple approached us looking to refinance their home to repay a bridging loan and raise capital for property investment. Both husband and wife are full-time landlords with a portfolio of more than 40 properties.
The property in question is a five-bed detached home in South West London, where the family have been living for the last three years.
After speaking with their high street bank and a local broker, the couple were concerned that they would be unable to borrow the amount the required in the time scale required. A friend had suggested that they approach us for help.
There were five main challenges with this case:
- The couple’s income is derived solely from rent – not all residential mortgage lenders will accept full-time landlords
- With more than 40 properties in their portfolio, we need to find a lender which does not limit the number of properties owned/mortgaged
- The couple wanted to borrow six times their joint income – almost unheard of within the residential market
- To maximise their borrowing, the couple wanted interest only terms - not widely available on home-owner mortgages
- Because the bridging loan was nearing its term, the couple needed the deal to complete within three months. Although normally not an issue, the Christmas break can lead to delays with some lenders
At present, there is only one lender which will allow applicants to borrow up to six times their income, so we knew who to approach straight away. Further, these particular mortgages are extremely limited and can only be accessed by Mortgages for Business and a few other brokers.
As time was of the essence we needed to submit the application as quickly as possible. We worked with the couple to collate the documentation required including a property portfolio spreadsheet, application form and evidence of income.
Within three weeks of submission we received a formal mortgage offer and the case is due to complete mid-January, well within the couple’s deadline.
Here are the details of the deal:
Property value: £2,000,000
Loan amount: £614,000
Rate: 3.15% 5 year fixed LIMITED EDITION PRODUCT
Term: 25 years interest only
Mortgage payment: £1,614.44 pcm
Previous monthly payment: £4,017 pcm
Lender arrangement fee: £999 (added to loan)
2nd January 2018