I recently assisted a client with complex mortgage requirements who was looking to remortgage their home. The property in question was a beautiful 8-bedroomed property in Surrey, valued at just over £1.5million. However, there were several background issues which meant my clients were finding it difficult to secure the amount of borrowing they needed.
The husband had been working for his current employer for less than a year. Meanwhile, the wife was currently on maternity leave and was receiving maternity pay. This meant that cash flow was tight. They also wanted to refinance onto an interest-only mortgage product to improve cash flow until the wife returned to full-time pay.
Fortunately, I knew of a lender whose flexible attitude to complex mortgage cases meant they might be willing to consider the case. This lender could assess the affordability based on monthly net income and expenditure, rather than pure income multiples. I also managed to get this lender to assess affordability on the wife’s ‘return to work’ income, rather than her current maternity pay.
To secure the loan on an interest-only basis, I was able to reassure the lender that my clients would certainly sell the property and downsize once their children had finished education. As the property was an 8-bed, it was clear my clients would not need a property of this size in the long term.
We then met a further hitch: the property was down-valued by the lenders’ valuer, resulting in a higher loan to value (LTV) bracket and the total loan being above this lender’s interest-only LTV limit. Fortunately, my excellent relationship with the lender meant I could negotiate for the portion of the loan which exceeded the interest-only limit to be on a capital and repayment bonus. Finally, I negotiated for the product fee to be added the loan instead of paid upfront—a great result for my clients, in light of their current cash flow concerns.
The final product secured was a 5-year fixed rate of 2.75%, with a 0.5% lender arrangement fee. As this case illustrates, we can surmount a variety of complex mortgage problems to find excellent results for our clients.
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