Sometimes, clients have already applied for a loan facility but are struggling with their lender’s poor underwriting or slow service, putting their property purchase in jeopardy.
This is the situation a husband and wife found themselves in when they approached me regarding their £4.4 million purchase in Kensington.
They needed a £2.2 million (50 per cent loan to value) million pound self employed mortgage. They both worked in the leisure industry and profits in 2012 were around £1.2 million with projected profits in 2013 rising to £1.8 million.
These clients had already spoken to a lender who had provided them with some indicative terms. However, the time taken to formalise the deal had meant that the estate agent was becoming uneasy and the clients were running the risk of losing a very desirable property.
I agreed a £2.2 million loan facility quickly with a major offshore private bank based on the company’s existing accounts and a projection for the next full year. The bank offered the facility at 1.75 per cent above 3 month LIBOR on a pure interest only basis with no early repayment charges. The client agreed to move assets worth 50 per cent of the loan to the management of the bank in question.
While the terms I agreed were slightly higher than the clients had been offered originally, the fact that I was able to agree the loan quickly and reassure the estate agent that the application was progressing helped the clients to secure the property.
Sometimes, holding out for the very lowest interest rate can end up costing a client their property if their lender isn’t efficient enough to underwrite the loan quickly.
This is where we can help by agreeing a facility quickly and by liaising with agents and solicitors to ensure the deal exchanges before the deadline.