Quick gifted equity mortgage for property purchase before stamp duty changes

THE SCENARIO

Having previously completed his main residential mortgage, a client recently referred a friend to me with a case no other broker had been able to find a solution for. Due to our excellent relationship and service throughout his previous mortgage, my client knew we would be able to meet his friend’s financial requirements and source the appropriate loan.

Aside from his main residence in London, my client wanted to purchase his parents property, which was worth £1.5 million. This case was essentially working around gifted equity, ensuring the loan could be structured to serve inheritance tax funds for my client in the future.

We were lucky enough to be able to use the equity within the property to pay for the transaction, so no additional funds or deposit had to be provided. However, there were a few challenges aside from this, the main one being their parents would remain in the property after completion.

A lender had previously been approached directly, yet the case was declined straight away, reinforcing the fact it’s always best to have a broker on your side to avoid affecting your file. Most lenders are very wary of a case like this if they know the current residents will remain in the property.

I approached many lenders initially in order to increase their options and discover who would offer the best rate, despite having a good idea of the best lender for the case.

Luckily, the lender I had in mind was able to accept the application. As a self-employed company owner with a complex income stream, the lender was willing to use the company accounts and existing mortgage repayments to calculate affordability.

Time was also a very key element for this case as we needed to complete before stamp duty changes, which were about to come into force.

OUR SOLUTION

I managed to secure a loan of £680,000 at a very competitive 2 year fixed rate of 1.54%, with an extremely quick turnaround of just 10 days. This was exactly what was needed and my client was so happy with the result his business partner has also now been referred to me.

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