I recently secured a case with an excellent turnaround, for a client who was looking for a residential remortgage of £937,500 on a £1.25 million property. My client’s current mortgage was coming to an end and his rate was about to shoot up. Because of this, my client was looking to achieve a better rate than he was already on, while equally attempting to raise an additional £112,500 where possible, to put towards home improvements.
Essentially, my client wanted to know whether he could arrange a better deal with his current lender or if he would find an alternative elsewhere. A question that I’m sure many borrowers are asking. This did, however, come with complications due to the additional funds he was looking to raise.
Nearly every lender required a detailed breakdown for the cost of works as well as planning permission – particularly if there were to be structural improvements. However, the planning permission by the previous owner had expired, which the underwriter would not accept.
Luckily I was able to persuade them to reconsider. The initial plan I pitched was to put a part-retention on the additional borrowing required where the lender approves the total loan amount, but holds a portion until certain additional criteria are met. In this case, new planning permission being granted. This would mean my client would be able to refinance his current balance onto cheaper terms with an additional loan facility agreed, which could be drawn down for the home improvements once new planning permission was granted.
In the end, the lender came back to us with an even better proposition than we had hoped. They decided that instead of waiting for the part-retention to be accepted, they were willing to let my client draw down on the total borrowing without the new planning permission at all – giving my client the peace of mind that he had the funds necessary for the works he had planned.
I was able to secure a base rate tracker plus 0.99% for an all-in rate of 1.49%. This was a 2 year term with no tie-ins, which would allow my client to refinance once the works were completed using the increased value of the property.