Third property purchase achieved without committing full cash savings.

Astute use of remortgage on an existing property.

Purchase completed to the deadline with a competitive rate locked in.

Our client

Our client was an owner of two properties looking to buy a third at a purchase price of £1,450,000.

What was needed

Of the client’s two properties both were used for residential purposes, one as the main residence and the other as a holiday home. The client was looking to buy another property and had sufficient cash to buy it outright.

What was the challenge?

The client was concerned about using such a large portion of his savings on this transaction, as he wished to have cash savings accessible for other eventualities.

Options were discussed for taking out a mortgage on the property the client was buying, but completion had to take place within a very short timeframe, so the client was concerned about getting the mortgage arranged in time.

An option was then considered of buying the property in cash and then raising a mortgage on the property after completion. However, with this option, the client was concerned about missing out on any competitive mortgage rate deals as it was necessary to wait a few weeks before submitting the re-mortgage application. Also, some lenders have a policy requirement that specifies that you must own a property for 6 months before submitting the re-mortgage application.

The combination of missing out on competitive interest rates and having a smaller pool of lenders to choose from due to the 6-month rule were the key challenges with this situation. 

How we provided the solution

Jerome Fick, Executive Director, understood the client’s mortgage goals and considered how these could be achieved. After careful thought, with the client’s agreement, he submitted a re-mortgage application for £400,000 for one of the properties the client already owned. Jerome advised the client to buy the new property in cash and use the re-mortgage application to top up his savings. By doing this Jerome was able to lock in a highly competitive rate and the client didn’t need to be concerned about getting the purchase done in time.

The client was delighted with this win-win option.

What was the rate

The mortgage interest rate is 0.90% fixed for 2 years.