I recently secured a £1.1m interest only remortgage with a capital raise for a client in his 60s.
My client in this instance worked as a barrister. He had an existing mortgage of just under £1m with a private bank against his £2.2m West Sussex main residence. Recently, however, his relationship with this particular lender had broken down and he was looking to remortgage.
Although his income was very strong, he had a certain amount of credit card debt, leveraged for cash flow purposes.
The nature of his work meant he was essentially self employed, and needed a degree of flexibility when it came to mortgage payments. For this reason, he wanted the mortgage to be on an interest only basis.
On top of the £1m mortgage, we were also looking for a small capital raise, partly to pay off the credit card debt and partly to provide a little extra cash flow.
I approached a lender with whom I have a strong working relationship, who concentrates particularly on lending to professionals and has a range of tailored products designed to suit their needs. This was especially important given his age. This particular lender was happy to lend to the age of 75 on the basis that my client could still be earning then.
The valuation of the property is a standard stage in the mortgage process. In this case, however, the property was significantly down-valued from £2.2m to £1.5m. Fortunately, I was able to act quickly, and found a different product for my client with the same lender, meaning the amount he was able to borrow did not change. Even though the loan to value (LTV) had increased significantly, this product was only marginally more expensive. In total my client was able to borrow £1.1m against a £1.5m property.
The product I secured was a 2-year fix at 1.79%, far lower than the rate he was previously paying, and a particularly good result given the high LTV. My client has now also entrusted me with the refinancing of a buy to let property he owns.
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