A married couple in their early 40s who were both professional solicitors approached Enness seeking a mortgage using 100% of bonuses between the two of them. They owned a property worth £3 million in Richmond which already had both a residential mortgage and development finance secured against it. They had purchased the property about a year ago and it had been undergoing renovations all year.
With this in mind they wanted to get one mortgage using 100% of bonuses that would cover their borrowing under one umbrella. They required £2.25 million to borrow against their £3 million property. This amount is a high loan to value (LTV), particularly when you add in the factor that, as lawyers, a large bulk of the income they generate is in the form of 100% of bonuses yet to be paid.
This meant that my main challenge was to find a lender which would consider their joint, currently unpaid bonuses so that they could borrow at a level of five times their income. They required a £2 million + mortgage using 100% of bonuses yet to be paid.
I spoke to a lender particularly receptive to professionals on aspirational career paths and has historically been happy to offer a mortgage using 100% of bonuses yet to be paid. After several conversations I persuaded them to take a view on the couple’s future earnings (they were both on path to becoming partners in their respective law firms), whilst stressing the increase in value the proposed developments would add.
Under the circumstances I was not expecting to get a particularly low rate for this level of borrowing. However, I explained this to the client and said I would ensure I secured them a mortgage without early repayment charges. This arrangement allowed flexibility to remortgage to a lower rate when their salaries increased and the development work was finished.
I secured a variable rate of 3.89% from a private bank. This meant they had £2m to pay back their first charge mortgage and development finance, with an additional £250k to complete all of the remaining work on their property. My clients were very happy with the outcome and I look forward to helping them again within the year.