The client: Our client, who owns his own business, wanted to remortgage his £6 million main residence. However, the case was complicated in that he needed to use net profits from his business, as well as trust income, for affordability purposes.
To complicate matters further, and in common with many others, the business accounts showed a loss during the pandemic so we needed a lender who would take a view over a five-year trading period, alleviating the loss and showing the business was making a large profit before and after Covid.
We needed a lender who would be prepared to calculate our client’s affordability on the basis of the above and lend on a part-repayment/part-interest-only basis in order to keep monthly payments at a manageable level.
Key requirements: –
• A lender prepared to agree to the remortgage of the client’s property for the full amount, taking a view over a five-year trading period of the net profits from their business.
• A lender prepared to lend on a part-repayment/part interest-only basis.
• A lender prepared to add the fee to the mortgage.
After sourcing the market, we identified a lender who agreed to lend the full amount required and take a five-year view on the business’s profitability, as well as taking the trust income into account.
The application process: To support the mortgage application, the client provided evidence of his business income, as well as evidence of his identity. We were delighted to inform him that a lender had issued a formal offer for the full amount requested.
• Property value: £6m
• Loan amount: £4m
• LTV: 66%
• Rate: 4.59% fixed for two years
• Lender product fee: £995
• Monthly payment: £17,558