A former client recently recommended a client to me who was looking to secure a mortgage to purchase a new £1.2million family home. My client was the CEO of a large company and the sole earner for his large immediate family.
The family lived outside London permanently in their current home, but my client had a London property too for work purposes. This was the first issue with this case, even though my client would sell their current family home, there was no way that this transaction would be completed by the time the purchase of my client’s new property had gone through.
My client’s current lender would not allow him to take out a loan if he was the holder of three residential mortgages and he was struggling to find a lender who would. The problem was that lenders have to take into account the affordability of my client paying off all three mortgages before committing to terms. In addition to my client’s three residential mortgages, he had a £36,000 per annum car payment and was committed to spending £20,000+ on school fees.
On top of all this, my client required a high LTV of 80% of the purchase price but 85% LTV of the valuation price which had come back lower than he had expected. Approaching lenders, therefore, would need careful preparation to build a positive case and negotiate the best deal for my client.
Using my contacts at a large high street bank I was able to set up a meeting and present my client’s case. I persuaded them to take into account my client’s capacity for future earnings and the fact his previous property would soon be sold, and terms were offered.
Going to a high street lender rather than a specialist lender ensured my client’s rate was highly competitive – had I gone to a specialist lender the price would have been doubled. Relying on my network of contacts within this bank was also a crucial component to the success of my client’s case being accepted with the best rates by the lender.
My client’s needs were met at a rate of 1.45% over a two-year fixed term. My client was ecstatic and is very much looking forward to moving into his new family home.