The clients:
Our client was looking to re-mortgage their home to obtain another competitive rate. And avoid switching on to the lenders high standard variable rate. Our client is a celebrity Chef and owned 5 separate companies with various income sources from all 5.
The property:
Located in London and is a 4 bedroom Mid terraced property that has been valued at £1,650,000. Which the client bought in 2018 for £1,400,000. With a two year fixed rate mortgage costing him £4,609 pcm.
The finance:
The clients’ existing mortgage is about to revert to the lender’s Standard Variable Rate which means his monthly payments will increase to £5109.
He had already asked his mortgage provider if they could get a product transfer, but the terms offered were not particularly attractive, so he asked for our help to find him a better deal.
His Key requirements:-
A part repayment and part Interest only mortgage to keep monthly repayments as low as possible. Our client has an existing BTL property that would be used to repay the interest only part of the mortgage. When sold in the future. A lender that turns around applications quickly. The ability to add the lender arrangement fee to the loan. A Lender that will take clients various income sources and existing property portfolio.
We are aware of lenders that are flexible with interest only parts of the mortgage so we then checked which ones allow the various income sources and property portfolio in the background and the ability to add fees to the loan.
But, after sourcing the whole mortgage market we identified a competitive rate which will allow the client to borrow the full £1,200,000 on a part repayment/ part interest only basis and taking into account the various income sources being used across all of the clients 5 companies. Therefore, this new product would mean that the clients monthly payments will be £1,267 less each month from what they currently pay and saved them reverting onto their existing lenders SVR.
however, as an added bonus, this new lender is offering a free valuation and free legal fees.
Therefore, these features and benefits really appealed to our client and we were able to submit a decision in principle. And get approval from the lender before submitting the full application.
The application process:
In other words, to support the mortgage application, the client supplied us with proof of identity. Address and company accounts for his 5 companies. We were able to deal with an underwriter that dealt with HNW clients. And were able to review all the documentation and the application was approved. The same underwriter dealt with the whole case from day one and a formal mortgage offer was issued two weeks later. Likewise, we were delighted to inform our client that the lender had issued them with a formal offer for the full amount.
In short, we arranged the completion of the re-mortgage to coincide with the end of the clients existing fixed rate product which prevented the client paying any Early Repayment Charges or switching onto the lenders high Standard Variable rate.
Property value: £1,650,000 Loan amount: £1,200,000 LTV: 73% Rate: 1.26% 2 year Fixed Term: 21 Years Lender facility fee: £999 added to the loan Monthly payment: £3,342
