I recently sourced a loan for a client who had sold his main residence and was looking to buy a new residential property. My client wanted to remortgage two buy to let properties in order to raise funds to buy his new residence mortgage free. The buy to let properties were based in West London and worth circa £500,000 each.
The main challenge we faced with my client’s circumstances for this buy to let cash purchase, was maximising borrowing against the two buy to let properties. Even though we work closely with lenders who are willing to grant higher loan to value mortgages on ‘pay-rate’ products, these usually have arrangement fees that are up to 3% of the loan size. These products are also normally variable and my client was looking for a fixed rate product with fixed fees. This was to ensure the monthly payment would not be affected by any movement in the Bank of England base rate.
I initially found a lender who was happy to lend against the properties, however, this would only be with the pay-rate products and arrangement fees previously mentioned, which were not fitting to my client’s requirements. Equally, it wasn’t long before we had another problem on our hands. This lender was set to increase its ‘stress test rate’ (which dictates the maximum loan size based upon a ‘what if’ calculation). By reducing the maximum borrowing amount available, the client’s cash purchase would not have been possible.
Despite facing delays due to a change of solicitor, my strong working relationship with the firm ensured we were still able to work efficiently and collaborate as a team in a timely manner. As ever, acting quickly and being proactive paid off for all involved and we were ultimately able to find the best solution for my client.
Overall, I managed to successfully maximise borrowing to facilitate the cash purchase while securing two fixed buy to let products that came with fixed fees. My client was delighted with the outcome and has since assured us he will refer friends and colleagues to Enness in the future.