My clients were a married couple with two children, who had lived in Singapore for three years and worked in high profile jobs. Having returned to the UK 18 months ago, they were paying a large amount of rent each month and so were keen to purchase a new family home.
They had previously approached another broker for help, but unfortunately, they had a negative experience. Their first broker had told them they would be able to borrow more than they could—when the case progressed, it transpired they could actually borrow £200,000 less than promised. My clients then approached me, knowing Enness had access to a wide lender panel, to see if we could help.
The property in question was valued at £1.65million, needed some renovations, and was located in a desirable location in the countryside surrounding London.
Overall, they were looking to borrow £1.32million, with as much of the loan as possible—if not all—on an interest only repayment basis. Securing a large interest only loan is much more challenging, and often requires a broker with fantastic lender relationships. Unfortunately, there were multiple other factors which made this case complex.
My clients wanted the exit strategy to be the sale of the property. Many lenders will cap the borrowing at 50% loan to value (LTV) when offering an interest only loan, but my clients hoped to borrow 80%.
Furthermore, my client’s wife had recently changed jobs, meaning she had not received a bonus in her most recent employment, which was going to be essential for calculating the affordability.
As mentioned, both clients had also been working abroad. Many lenders will require the borrowers to have been working in the UK for at least three years.
I have a relationship with the private arm of a high street bank; this arm is able to offer similar products and criteria as the main bank, but with more flexibility. I approached them to arrange this large interest only loan. This lender used my clients wife’s historic bonus income, meaning we could reach the affordability criteria required. By outlining a strong record of bonus income, I was able to reassure the lender she would continue to achieve large bonuses.
This lender was able to offer 75% on an interest only basis, with the rest on a capital and interest repayment basis, which was the best compromise for the client. The final rate arranged was a 5-year fix at 2.59% for a term of 20 years.
At Enness, we pride ourselves on succeeding where others have failed—if you have unusual circumstances that have stopped you from arranging finance elsewhere, contact us for a further discussion and we would be delighted to help.