I was recently approached by a client looking to arrange a high loan to value mortgage. This client had been in touch with several other brokerages already, but all of these had failed to provide him with what he had in mind.
My client was an extremely successful entrepreneur, who had founded and grown a very prominent business in the UK. He was now hoping to purchase his first main residence in Central London and was looking at an apartment valued at £3million.
He was confident he would be able to service such a large loan, as his business had taken a clear upward trajectory over the last few years. However, because he had intensively invested his profits back into the business to keep supporting this growth, he did not have a big enough income to be able to justify such a large loan.
Furthermore, my client was hoping for a very high loan to value (LTV) mortgage. He hoped to put down as little deposit as possible to free up more funds for his rapidly growing business.
Securing a loan with 90% LTV when the loan is over £1million is extremely challenging, although as Enness has discussed in the past, it is possible with the help of the right broker. Fortunately, we are experienced in arranging such loans.
I knew I needed to find a lender who would understand the reason behind his lower than usual income. I, therefore, looked at lenders who would have an understanding of how his business was run, as we would be able to demonstrate to them the sustainability and longevity of his business’ strong performance.
Due to our wide panel of lenders, I managed to find a specialist lender who was happy to give the client exactly what he wanted—a high loan to value mortgage at 90% LTV, at a 2-year variable rate of 3.84%. The higher the LTV, the more expensive the rate will typically be—however, the LTV was my client’s priority in this instance. This allowed my client to get his foot on the London property market, whilst also maintaining the level of liquidity he required to ensure constant investment in his business.