A very interesting case came across my desk last month, which I managed to secure fantastic terms for. My client was an Indian national residing in Dubai, who wished to achieve a prime central London remortgage an unencumbered property in prime central London for £910,000 to repay a loan.
The property, worth £1.4million, was primarily used as a student home for my client’s daughter studying in London, but also served as a second home for the family whenever they visited. This gentleman had never worked with Enness before, but was aware of our reputation for securing market-leading rates for foreign nationals such as himself. My client worked as a self-employed engineer, and lived with one of his daughters and his wife in Dubai, his other daughter attending university in London.
This prime central London remortgage was required in order to repay a loan which had been taken against my client’s business. Although this may appear as a simple transaction on paper, there were a few issues which made securing terms quickly a difficult task.
For one, my client’s status as a foreign national – and further, a non-UK resident – made securing a loan with a UK lender much more of a challenge. Not only this, but the fact my client wanted the mortgage to repay a business loan prompts questions from lenders about his affordability, especially with a self-employed income structure.
One of the biggest hurdles was that my client wished to borrow an interest only loan. Lenders approach interest only loans with caution, particularly on residential properties, as a result of tighter regulations and ensuring ‘best advice’. The maximum mortgage term my client could obtain on interest only is 10 years, so I would have to demonstrate that it is feasible for my client to repay his loan of £910,000 over this 10-year period.
Fortunately, my client had a bounty of assets in the background which would settle any lenders nerves regarding interest only affordability. Although my client only took a small salary from his business, I was able to act on his behalf to demonstrate to the lender that my client also received a large income from dividends and had access to net profits.
I managed to secure a brilliant rate with a lender whom Enness have an extremely close working relationship. Due to the influence and understanding that existed with this lender, they were comfortable with my client’s nationality and residency, and took a favourable view on the purpose of the loan, and I was thus able to secure the client’s prime central London remortgage.
As a result, my client was offered an interest only loan covering 10 years, on a 5-year fixed rate of 3.19%.