I recently arranged a self employed interest only remortgage for a client whose age made it a particularly interesting case.
A 65 year old lawyer, my client was looking to raise money on his existing residence in order to buy a plot of land. He was planning to build on this land at some point down the line, but as yet there were no concrete plans in place. His existing property was valued at £1.75m.
Having practised as a solicitor for many years, he had taken over a law firm two years ago and was now self employed. The firm was set up as a limited company.
There were a few challenges for me to negotiate with the lender. Firstly, he was after a 9 year term, and at 65 his age was a potential problem. Secondly, his business had only been going for two years, meaning that he only had two years of accounts to show. In general, lenders want to see three years for self employed applicants. Thirdly, there was an element of trust in the loan; the development of the land was not going to happen straight away, and the lender had to take his word for it.
My client also wanted an interest only mortgage. His repayment plan involved downsizing – he was planning to sell his existing property at the end of the term and move into the one he was building – and interest only is not usually allowed for this structure of loan.
We needed to find a lender who would take a view on the situation. Although on the face of it he had just started his own business, he had many years of experience as a solicitor to his credit, and he was therefore in better stead than most to make it a success. I was confident that we would get a good result if we presented the lender with a structured, well thought-out case.