The clients: A married couple living in London. The wife is currently on maternity leave, which she plans to extend, the husband is a full-time landlord with a large portfolio of rental properties.
Having come to the end of their initial mortgage term, they had approached us looking to refinance onto a better rate.
The property: Their family home is a four-bed semi-detached Victorian house in East London.
The finance: The couple’s mortgage payments had recently increased after moving onto their lender’s standard variable rate.
As they were now looking to refinance, they had decided to take this opportunity to move onto interest only terms. Interest only terms aren’t widely available as lenders aren’t comfortable with borrowers selling their home to repay the loan.
We approached the intermediary arm of one of the high street lenders to see if they could assist. As the couple have a buy to let portfolio, the lender was willing to offer part interest only terms, as the buy to let properties can be used as part of their exit strategy.
The application process: We helped our clients complete the mortgage application form and collate the supporting documentation which confirmed their identity, address and assets. We then submitted the application for processing.
The bank requested a letter from the wife’s employer confirming her salary and date of return to work. This was duly obtained and mortgage completed within the agreed timescale.
By refinancing the couple have saved £1,200 a month in mortgage payments.
Here are the details:
Property value: £620,000
Loan amount: £420,000
Rate: 1.40% on a two year fixed rate
Term: 25 years, part repayment, part interest only
Mortgage payment: £671 pcm
Original mortgage payment: £1,871 pcm
Lender arrangement fee: £999
6th March 2018