I recently arranged a remortgage from interest only onto a repayment basis for a 61-year-old client whose property was down-valued halfway through the process.
My client in this instance was a solicitor, and still working although he was in his sixties. He lived in Scotland, in a property against which he had an interest only mortgage. He was becoming concerned about his lack of a repayment vehicle; he had no pension or savings provisions in place to repay the debt, and was anxious that he was about to be liable for the full mortgage amount.
He therefore wanted to remortgage onto a repayment product, and was looking for the longest term possible – a challenge given his age. The number of lenders who will lend up to the age of 75 without the borrower having retirement provisions in place is limited. Another potential hurdle was the nature of the property itself. It was stone-built, something not all lenders are comfortable with. A final complication arose when it transpired that his wife, who he had wanted to name on the mortgage as well, had light adverse credit.
I therefore had to find a lender comfortable with both these factors, and convince them that my client would be able to continue working up to the age of 75 on the same level of income. It was a matter of structuring and presenting the case in the most advantageous light possible.
My client was unsure about his property’s value and, at the valuation stage, it was down-valued, meaning the solution I had come up with was no longer viable. While staying with the same lender, I had to find a way of restructuring the product. This involved raising the loan to value (LTV) from 75% to 80%, meaning my client was still able to complete his remortgage.
I managed to secure him the repayment mortgage he needed at a rate of 2.29%, on a 13 year term. This switch from an interest only basis has lifted a burden from his shoulders and given him peace of mind.