£1,695,750 mortgage on purchase price of £1,995,000
2.19% interest rate
Clever way devised to purchase dream property despite complex financials
Existing clients of Rose Capital Partners had re-mortgaged at the start of the year on a 2-year fixed rate (expiring 2022) but had now found a new property that they fell in love with and were desperate to be their ‘forever home’.
What was needed
The clients didn’t think it would be possible to buy this much desired property, as it was already under offer, and unless they could be chain-free and bid over the asking price, they would likely lose the house. They needed an inventive mortgage solution to help them secure the home they had fallen in love with.
What was the challenge
In addition to their existing fixed mortgage and over-asking-price borrowing needs, affordability criteria were also an issue for many lenders they had approached.
One of the clients, had started a new job recently for a lower salary than previously (it was a tech start up) and received a guaranteed bonus for first month. After this, as per his agreement with his employer, he has no further income until end of the year once he has built up his pipeline.
The couple had financial assets, but these were in France and they wanted to bring as little over as possible to the UK for tax efficiency.
They had tried to find a solution with many lenders but had been rejected.
How we provided the solution
The clients telephoned Bethany Smith, Associate at Rose Capital Partners, to see if she had any ideas on how they could achieve their mortgage goals.
Bethany recommended that they request consent to let their current home and sell this at the end of the mortgage fixed period to avoid early redemption charges and be refunded the Stamp Duty. This would also enable them to use the income for the deposit for their new home going forward.
Coutts were happy to consider the case, as they considered the guaranteed income, and overseas assets to strengthen the case when assessing affordability.
The lender was agreeable to offer 85% loan to value which meant less money was required to be transferred from their assets overseas. Moreover, the new lending was agreed on a penalty free basis which gives the clients the flexibility to reduce the loan if they sell their current property and ensure they aren’t ‘trapped’ in their new situation.
The clients were delighted that a lender could be found that would meet their complex borrowing requirements and they could therefore secure their ‘forever home.’
What was the rate?
The rate was 2.19% Base rate Tracker (Base + 2.09%) for 2 years, with a 0.5% lender fee.