What was the situation?
I was recently approached by a married couple who were looking to secure a large loan and upsize their home as their young family had outgrown their existing property. The couple had set their sights on a bigger and better residential property nearby and were very keen to secure it, due to the house being near to their other family members and located within close reach of several top schools in the area.
Although the new property was just what my clients were looking for in terms of size, location and character, it needed some significant renovations to bring its condition up to modern standards.
What was the issue?
There were a couple of challenges to overcome in this case. Firstly, the husband was due to receive a pay rise which would not take effect for three months, meaning it would come in after the transaction on the property was due to complete. Furthermore, to achieve the maximum level of borrowing, we needed to include the wife’s pre-maternity income. Her income had become greatly reduced as a result of statutory maternity leave following the birth of their son a few months prior to the application.
However, by leaning into our close relationships with our extensive network of both specialist and high street lenders, I was able to confidently approach a high street lender who offered us the highest income multiple based on the letter showing proof of my client’s imminent pay rise and acceptance of his wife’s pre-maternity leave income (as she is soon due to return to work).
Despite this positive outcome, however, we were unfortunately unable to secure a mortgage high enough to allow my clients’ to complete the transaction and carry out the desired renovation works on the new property.
What was the process?
After consulting with some of her family members, my client’s father contacted me to see if there was a possibility of him assisting in the process. However, due to now having a reduced income from recently starting his retirement, playing him as a guarantor for this case was not an option as it would not give my client’s their desired outcome.
After some consideration, we established that I could set up a mortgage on the father’s background property that would release equity for him to gift to my clients. Doing this allowed my clients to successfully purchase the property and complete the necessary renovation works on their new home.
My clients were well aware that the father’s age would limit the mortgage term that he could apply for. This called for us to arrange the facility on an interest only basis, allowing him to reduce his contractual monthly payments and instead make ad-hoc overpayments throughout the term to reduce the debt.
What was the solution?
In conclusion, I was able to find a lender who could lend the maximum amount based on my clients’ income and structure a mortgage that could use the equity from my client’s father’s investment property. This meant that my clients could complete the necessary renovation work to turn the new property into a true family home. My clients were beyond thrilled with the outcome and delighted that despite financial hiccups along the way, they are now able to live in their desired property in a prime location thanks to our creativity and ability to navigate the issues raised and secure the large loan required.
Lending solutions with LDNfinance
Are you running into barriers while trying to purchase your dream home? You’re not the only one. Whether you’re struggling with the competitive housing market or trying to overcome financial hurdles, we’re here to help you find a solution – no matter how complex your circumstances. At LDNfinance, our specialist brokers have a wealth of experience in providing creative solutions to secure large loans for our clients.
We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.
Get in touch with us to organise an initial consultation.