Buy to let remortgage to capital raise for first family home

CONTACT MICHAEL

THE SCENARIO

I recently helped a couple who had enough of living in their parents’ property while they were starting their own family and wanted to buy their very first home, despite having no savings towards a deposit.

These clients had recently had their first child, so wanted to move out of their parents’ home as soon as possible as things were getting cramped. Although they had no saving towards a deposit, one of them did have a buy to let property in the background which was passed on as an inheritance.

Because of this, I suggested a buy to let remortgage on this property so they could capital raise to fund the deposit on the new purchase. This was a great solution, however, there were a few more hurdles along the way.

Seeing as the wife had just had a child, she was not looking to go back to work in the near future, so their borrowing had to be based on the husband’s income alone. Due to his position as a Surveyor, he had only started receiving commission over the past few months, which proved an issue for almost every lender. This is because lenders tend to use the lowest of the year-to-date figure, or an average of the last three months alone. However, my client had received commission over the last four months, so his average worked out higher than the year-to-date figure shown meaning he wasn’t able to borrow the amount required to purchase their new home.  

OUR SOLUTION

Despite this, I was able to place my client with a lender that was happy to look solely at the largest of his three months’ commission figures, resulting in the necessary borrowing. This is a very unusual result and one that worked excellently for my client’s situation.

With the buy to let remortgage from their existing background property, we were able to secure the necessary mortgage amount, with an extremely affordable rate of just 1.89%, which was fixed for two years.