Residential remortgage to consolidate debt

The client: A married couple with two young children looking to remortgage their recently refurbished home.

Having taken out personal loans to finance the project the couple were now looking to raise enough capital to consolidate their debt.

The property: A large home in South East London. The property had recently been extended to include five-bedrooms and a larger living room.

The finance: The couple had borrowed just shy of £150k to complete the refurbishment works. This meant they would need to refinance at 85% loan to value to cover the repayments and their existing mortgage.

There were a few complications with this case which would restrict the number of finance options available:

Not all lenders will accept debt consolidation as a reason for capital raising
One of the applicants had recently changed jobs and was yet to pass probation
The property was deemed uninhabitable at the time of application as the kitchen works were yet to be completed

The application process: With whole of market access and an excellent understanding of lending criteria we knew which lender would be best to approach.

We decided to take the case to a building society. This particular lender will accept applicants who are still in their probationary period. It is also happy with debt consolidation as the reason for capital raising.

We explained the kitchen situation to the lender and advised that the works would be complete before the valuation was carried out.

The valuation came back in at £180k more than the couple had purchased the property for in 2014. Happy with the works, an offer was made. Here are the details of the deal.

Property Details

Property value: £670,000

Loan amount: £569,500

LTV: 85%

Rate: 1.99% 2 year fixed rate

Term: 33 years

Lender arrangement fee: £495 added to loan amount

Mortgage payment: £1,664 pcm

Previous mortgage payment: £1,330 pcm

Consultant mortgage adviser: Ross MacTaggart, 01732 471 630 or 07814072177

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