I recently arranged a million pound mortgage on a split title property at the high loan to value (LTV) of 80%.
My clients in this instance were a husband and wife. She was a director at a global software firm, and he was the Chief Commercial Officer of an IT company. They were first time buyers, looking to purchase a main residence.
The property they settled on was a new build in East London, with a purchase price of £1.3m.
The first difficulty was that they wanted a very high LTV – 80% – bringing the mortgage over the million pound mark. Lenders are usually reluctant to issue such large LTVs when dealing with these sorts of figures, and securing my clients the loan they wanted was going to be problematic.
The second complication was the nature of the property itself. The title was split, with both commercial and residential elements registered.
This type of property is unilaterally avoided by high street lenders. If there is any hint of commercial use on the title, they will turn the applicant away. In this case, the title was unalterable, meaning we couldn’t separate the commercial lease from the property.
I approached a particular private bank who I felt would be prepared to take a more holistic view of the title and the property itself.
They agreed to the loan in principle, but initially said they were only comfortable lending at 75% LTV.
I had done a lot of work with this bank in the past, and knew the decision maker well. I spoke directly to her, emphasising the value in real terms of this particular property as security. She agreed to bend their policy for my clients, and increased the offer to 80%.
This meant my clients had a little more cash to ensure the moving process went smoothly, and a little more to spend of furniture and so forth once the property was theirs.