What was the situation?
I was approached by 3 clients, all siblings, looking to raise money for the care fees of a family member.
The property was unencumbered with the family member still living in it, however knowing that the person would be moving into care shorty, the siblings wanted to raise as much money a possible because they didn’t know how long the person may be in care for. All 3 siblings were employed, and had their own financial commitments but could contribute to the monthly payments.
What was the issue?
At the time we first spoke, the clients were unsure of best way to raise money quickly, even though they didn’t need the full balance immediately. They were also looking to achieve 75% loan to value on an interest only basis.
What was the process?
Knowing that the clients were not looking to utilise the full loan immediately, an offset mortgage was discussed. This would mean that the clients would receive the full amount immediately, but could set the loan aside in a savings account and draw down smaller amounts as required, only paying interest on these elements. In essence, an offset mortgage solution allowed the clients access the funds when required, whilst also allowing them to offset the interest until the point they needed it.
With outstanding lender relationships and criteria knowledge, I knew I needed to approach a lender who would allow the clients to proceed on interest only basis up to 75% of the property value, disregarding the need for a minimum equity requirement on the property.
The client had previously been told 50% loan to value (LTV) would be their maximum loan – I managed to achieve a higher loan whilst keeping their interest only and offset demands.
What was the solution?
Despite having been told 50% LTV was the maximum amount the siblings could achieve, I was able to speak direct with underwriters and explain the clients ability to afford more. I successfully secured a facility up to 75% LTV of the property value to be used as and when required for fees. This gave clients the desired piece of mind for funding future care fees.
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