One of my recent cases was an £800,000 mortgage on interest only for a 60-year-old client who, unbeknown to him, had a County Court Judgement (CCJ) lodged against him.
My client in this case was the CEO of a digital radio company. Earlier in the year he had sold his previous property, and had been renting during his search for a new main residence. He had now found a property in Highgate for £1.6m, and was looking for a loan of £800,000 on interest only to complete the purchase.
An unexpected complication arose after we had submitted his application. The application was declined by a high street lender and, upon investigation, we established that my client had an outstanding CCJ of £35,000 against him, registered earlier that year by the estate agents he had sold his property through. Until it was brought to light by the application, he had been completely unaware of it.
Fortunately, my client had the money available to satisfy the CCJ straight away. This did not, however, change the attitude of the high street lender – which would be shared by any subsequent high street lender we approached. High street lenders are hugely risk-averse, and unsympathetic to CCJs and other credit blips, even when there are clear mitigating circumstances. As the high street was off the table, I had to find a lender willing to take a more flexible view of the situation.
I approached a building society which manually underwrites its cases rather than relying on automated systems. I put together a strong case for my client, pointing out the good loan to value ratio (LTV) and his strong affordability, and emphasising that this blip was entirely uncharacteristic.
Their underwriting procedure meant they had more scope to be flexible, and this lender was ultimately happy to make an exception for my client.
I secured a loan of £800,000 on an interest only basis on a 2-year discounted product, with an initial rate of 3.89%. My client was delighted with the result, and is now CCJ-free – and happily established in his new home.