The clients: A married couple in their early 70s. The wife works owns a local charity shop and the husband is retired. In addition to their home, the pair also own two rental properties.
The pair were looking to raise capital against their home to repay their credit card loans. They were also hoping to raise enough to carry out some renovation works on one of their rental properties.
They plan to move into this property once they have both retired.
The property: A large six-bed family home in Shropshire. The couple had purchased the house over 30 years ago.
The finance: In total the pair were looking to raise £173,000. They had requested a two-year fixed rate on interest only terms. To repay the loan, the couple were eventually planning to sell their home and move into their renovated rental property.
The age of the applicants and their low income would decrease the finance options available.
The application process: We asked to see the couple’s total income for the last two years to see if further lending would be possible. To secure finance we knew we would need to find a lender which would take their rental income into consideration.
We spoke with a business development manager form a well-known building society. Happy with the couple’s repayment plan he informed us that they would be able to stretch further than the standard 4.5 income multiplier.
To the delight of the clients, the full amount was offered. Here are the details of the deal:
Property value: £475,000
Loan amount: £260,000
Previous loan amount: £173,000
Rate: 2.10% fixed for 2 years
Term: 6 years interest only
Mortgage payment: £458 pcm
Previous Mortgage payment: £1000 pcm
Lender arrangement fee: £1950
Consultant: Erin Gallacher, 01625 416392
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16th October 2018