What was the situation?
I was approached by a client looking to purchase a new home, as they had sold their previous main residence a few years ago and have been living with family since. The property they were looking to purchase was located in a popular area of southwest London local to thriving bars, restaurants and shops which made it attractive for my client.
Having found their new ideal family home, my client made an offer which was accepted at north of £900,000. They contacted me looking to secure a mortgage of £620,000. They were very keen to keep their monthly mortgage payment at a minimum to free up their disposable income for other means, and so wanted to explore a facility that would allow this.
What was the issue?
There were several facets that I had to consider when arranging this mortgage. Firstly, the clients senior age meant that many lenders would reduce the amount available to borrow as the mortgage term was relatively shortened when looking at the maximum ages allowed by most high street mortgage lenders.
Secondly, the joint borrower on the application was paid in US dollars. Although their income was not necessary to grant the loan, we did not want to restrict the lead applicant’s affordability scope and therefore had to present the joint borrower’s USD income in a way that lenders would not count them as a dependent on the lead applicant.
Thirdly, although the joint applicant had extensive experience and employment history in their industry, they had recently moved into a role with a new company which meant that they could not provide the track record of steady earnings and substantial bonuses that most mortgage lenders require.
What was the process?
Considering these challenges, I needed to find a lender that would be confident in providing a loan to these clients. After speaking to several private banks on these points, a majority felt confident with these complexities which meant we had several options. However, I was keen on securing terms from a high street lender as they would likely offer more competitive terms.
Needing a lender that would take a more holistic view on this application, I was able to speak directly to an underwriter at a high street lender with who we have a good professional relationship with. This conversation was had prior to application so that I could get the case pre-agreed prior to submission.
What was the solution?
Following my conversation with the underwriter, the application was agreed by securing an interest only and repayment mortgage for the clients. This consisted of a portion of the loan on an interest only basis and the remaining loan amount on repayment. This meant the monthly mortgage payments were lower initially as per the client’s request, whilst the lender was comfortable with the client’s future plans on repaying the loan.
The lender granted the full loan amount on the basis that they were confident in the earning potential of the main applicant’s annual bonus given her track history in the industry. Furthermore, whilst they are unable to accept foreign income, they recognised that the second applicant was in employment and hence did not count him as a financial dependent, which helped affordability.
The lender agreed to extend the mortgage up to age 75 from 70, to meet the client’s retirement age, which in turned lowered the payments on the repayment portion of the loan.
I was able to secure a 2-year low fixed rate for the total facility, of which over £450,000 was on an interest only basis, with the remainder on repayment. The lender was happy require no assets under management or reduction in the interest only portion in the first few years of the mortgage, which other lenders, and most private banks, may have stipulated.
The clients were delighted with the outcome and have successfully purchased their new family home.
Lending solutions with LDN Finance
We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our expert brokers have extensive 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.