£1.07m residential remortgage to capital raise

THE SCENARIO

I recently helped a 71 year old client secure a residential remortgage, so he could capital raise to fund home improvements. This client was an employed individual – he was Chairman of a company – and owned a property worth £1 million which he bought as a cash purchase in July last year.

My client was looking to raise £250,000 in order to fund an extension on the property and he also wanted to consolidate a £50,000 personal loan. He had previously contacted numerous brokers who were unable to help him due to his age.

Not only this, my client had not drawn on his work pension, so brokers were only able to go by his state pension. This would not allow him to borrow enough fund his home improvements.

Essentially, my client was looking to complete the extension work on his property to increase its value, so he could then sell it and downsize to a smaller property for himself. This should have been simple enough, but his age, combined with the pension income situation, was a problem with every lender he contacted.

However, I was able to source a lender, which was a small building society, willing to complete this deal on an interest only basis with a 5 year term. I managed to persuade this lender to see my client’s position from a different perspective; that despite his age, he was still in employment with a very sustainable income and would not be retiring for at least 5 years.

This was enough to pay off the £50,000 debt for him, with the rest of the funds released at 3 separate stages as the works completed on his home.

I secured all of this on a 3 year discounted product, with a rate of just 2.79% on an interest only basis.

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