The clients: Our clients are a young professional couple who wanted to substantially upsize to a much bigger home. They wanted to borrow £880,000 with a 72 per cent loan-to-value mortgage.
The case was not straightforward as one applicant is a lawyer but the other is currently furloughed. We required a lender who would be happy to take the client’s back-to-work salary into account. To allow them to proceed with the full loan.
To further complicate matters, the clients needed the mortgage to be on a part-interest only, part-repayment basis. This approach makes sense as our clients intend to downsize in later life. Using the funds from the sale of the property to pay back the outstanding capital and purchase a smaller home to live in. It meant that despite moving to a much bigger property, their Professional mortgage payments would be lower than their previous mortgage payments.
Lenders were sourced but this deal required specific criteria and took a lot of research to identify a suitable lender.
Key requirements: –
A lender comfortable with one of the client’s being on furlough and happy to take their back-to-work salary into account to enable them to proceed with the full loan.
But, a lender happy to lend a substantially large loan on a part-interest only, part-repayment basis. Borrowing at 72 per cent LTV on a property worth £1.21 million.
Ability to add the lender’s arrangement fee to the mortgage.
After sourcing the mortgage market, we identified a lender who would agree to our clients borrowing £880,000 on a part-interest only, part-repayment basis, even though one of the clients had been furloughed.
The application process
To support the mortgage application, the first client supplied us with evidence of their income and the second with a letter from their employer with details of their back-to-work salary following furlough, as well as proof of identity.
Property value: £1.21m Loan amount: £880,995 LTV: 72% Rate: 1.61% fixed for two years Lender product fee: £995 Monthly payment: £1671.71