Developer with complex income secures interest-only mortgage

The client is a successful developer who runs each development through separate Special Purpose Vehicle limited companies. Because of this, the companies showed a mixture of losses followed by high profit in differing years.

The client was hoping to buy a new home and despite having a large deposit was struggling to secure a mortgage directly with conventional lenders because his income streams were difficult to understand – he draws only a modest salary plus dividends from the SPVs. Also, the client wanted interest-only terms which few residential mortgage lenders will consider.

We approached a specialist bank whose underwriting team is trained to understand complex income structures and allows interest-only terms on a case-by-case basis.

An offer was promptly issued and the application proceeded without a hitch.

Interest-only terms were offered because the client could demonstrate access to sufficient funds, via his other properties, to repay the debt.

Here are the details of the deal.

Property value: £2,600,000

Loan amount: £1,400,000

LTV: 54%

Product: 2.09% tracker for 2 years

Term: 8 years interest only

Mortgage repayments: £2,438 pcm

Lender arrangement fee: £999 added to loan amount

Consultant: Jeni Browne

Consultant tel: 01732 471647

17th June 2015