Chris Lloyd
Key Details:
- Client: High-Net-Worth Individual
- Loan Requirements: Circa £1M
- Property Value: £1.4M
A high-net-worth client had to sell their existing home to finance the purchase of their new residence. They were able to negotiate an excellent price on their new home, but the buyer needed them to complete the purchase quickly. However, their current home, valued at £1,400,000, wouldn't have sold in time meaning they had a potential funding shortfall.
Bridging loans are ideal in this scenario as they can be arranged at speed. But they can often appear to be quite expensive versus long term mortgages, as interest rates are typically charged on monthly basis. Plus lender fees can be equal to 2% of the loan amount. However, Enness was able to secure a mortgage against the client's current home and their new home, which allowed the client to purchase the new home without putting any of their own cash into the purchase. Enness was able to avoid using a standard and costly bridging loan because the client's overall wealth was within the appetite of a private bank. As the client was keen to keep a mortgage on the new home after the sale of their current home, they were eager to establish a longer-term relationship with the client.
Enness raised enough funds to cover the stamp duty and deposit. The mortgage was already on a competitive base rate tracker, with no early repayment charges. Once the property was sold, the mortgage would be repaid. The mortgage against the new home was around £1,000,000, equivalent to 75% loan-to-value. The rate on this mortgage was highly competitive and fixed for 5-years. The client could therefore enjoy lower monthly payments on a full interest-only basis. At the end of the 25-year term, the client could downsize and repay the mortgage with the sale proceeds.
This is another excellent example of how Enness were able to assist a high net worth client in their unique financial situation, providing expert guidance and tailored solutions to help them achieve their goals. If you also require specialist advice on remortgaging your property, please get in touch via [email protected].
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