What was the situation?
I was approached by my client who was looking to purchase their first home. The property was a lovely flat, situated within a 3-storey house converted into flats. The property was a leasehold, however the transaction meant that the clients would be purchasing the freehold of the block as part of the transaction.
The clients had both regular and self-employed income available to repay the mortgage.
What was the issue?
A significant complexity with this case was that many lenders would not consider the application because the purchase of the property included the freehold of the block. Lenders see this as an issue as it involves legal responsibilities for the freehold that are deemed too complex. Additionally, the clients planned to own the freehold in their personal name and not a limited company which also complicated matters (lenders that are typically OK with these scenarios prefer the freehold to be held in a limited company).
What was the process?
Following conversations with different lenders, one in particular advised that they could consider the application subject to surveyors comments.
Unfortunately, following the underwriting review the lender declined the application due to the freehold being purchased as it would then change the property class to a freehold flat. However, this matter had been previously agreed and fitted within the banks policy. I pushed back on this challenge and the application was escalated to higher management. Upon review they accepted the application as it did fit within policy, and the case went to offer.
What was the solution?
Following confirmation that the lender was happy to proceed with the loan upon client’s purchase, the client completed on the purchase.
The clients were delighted that they were able to complete on their dream property. The whole situation was stressful, however they felt that they would not have been able to buy this property without our help and lender connections.
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