After having their £3.15 million offer accepted, a husband and wife approached me as they required a £2.25 million pound mortgage for self employed solicitor – around 72 per cent borrowing. The couple are both solicitors and set up their own legal practice a couple of years ago. The business has taken off in the last twelve months and profits have risen from £140,000 to just under £1 million in two years. The projection for the next full year put profits at over £ 1 million.
One of the main issues with this case was that the clients had no assets that they could transfer to the management of a private bank. Their deposit for their new purchase and associated costs were using up most of their personal savings with the remainder coming from the sale of an existing property.
I spoke to an underwriter who specialises in finance for legal professionals. Based on the company’s accounts, an accountant’s projection for the next year and six months business and personal bank statements, he was happy to agree a £2.25 million interest only facility for the clients with a bullet repayment arrangement.
At the same time, the estate agent selling the property my clients were seeking to buy had received a second offer for the property: £50,000 higher than my clients’ offer.
However, because the mortgage I agreed was underwritten quickly, my clients were able to meet the two week exchange deadline. The agent recommended to their vendor that they accept my client’s offer for the property – even though it was lower – as they understood that I was able to agree the finance and that my clients could proceed quickly.
The clients opted for a three year fixed rate at 3.19 per cent and, crucially, the bank did not require any assets under management to agree the deal.
This shows that strong relationships between a broker, the lender and the estate agent can help secure a deal even in the face of strong competition from other buyers.