Pre-Funded Short-Term Mortgage to Fund the Purchase of London Family Home

Head of Insurance

Victoria Barton

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Key Details:

• Clients: Dual Nationals
• Loan requirements: Short-term
• Property: Circa £2m property 
• LTV: 60%

This client approached Enness for financing to purchase a residence in London. They had a second residence in Europe, which they knew they would sell, so they only needed a shorter-term arrangement.

The client had a lot of assets, but their income needed to be higher to qualify for a traditional mortgage, which is solely based on the declared income on tax returns. We had to approach a lender who would consider the client's entire financial situation instead of just looking at their income figures.

The clients knew that they would be paying off their mortgage in a few years, so a long-term loan (5 years or more) didn't seem suitable. However, short-term bridging facilities usually only have a maximum duration of 12 months, which didn't align with the client's timelines.

We approached one of our private lenders to arrange a more flexible facility that had similar mechanics to a bridging loan. The interest costs were borrowed within the facility itself (known as a pre-funded loan), meaning they did not need to go into the depth of income & expenditure. Enness was able to offer a 2-year term to the client which was a perfect fit for their requirements. This option was similar to a bridging loan but without the high interest rates associated with such loans. As a result, the client was able to save on the interest accrued on the rolled figures.

If you require assistance with a mortgage to purchase a property, please feel free to get in touch with our experienced brokers to discuss your particular circumstances.