I recently arranged a buy to let remortgage to capital raise for an old client of mine who was looking to purchase a family home.
I had previously arranged financing for this particular client, and he approached me again for his latest project as it wasn’t entirely straightforward. He was a banker based in London and had recently married. They had plans to start a family and were thus looking to purchase a larger home in south-west London to move into. They had settled on a price of just under £900,000 for the property.
On top of his current main residence, he also owned two buy to let properties in south-east London. As he already had a mortgage on his current home, he made a net profit of £200,000 when it was sold. He therefore needed to make up the shortfall between the sale of the old property and the new purchase by refinancing one of the buy to lets.
The property was valued at £535,000, and my client was looking to secure a mortgage of just over £400,000, meaning a loan to value (LTV) of 75%. Ideally, he wanted the loan on an interest only basis, using the future sale of the property as the repayment vehicle.
As the rental income from the properties was relatively weak, the challenge was to find a lender with a sufficiently favourable rental assessment. At Enness, our fee structure means we are able to use lenders whether or not they pay us procuration fees. Unlike many brokers, we have access to the entire market and are able to act solely in the interests of our clients.
As well as fulfilling these requirements, I was able to find a lender who used a pay rate product to enhance the borrowing available to my client.
The product I secured was a lifetime tracker at 3% above the base rate, meaning an all-in rate of 3.6% for the term of the loan. My client and his wife are now happily moved into their new home.