Scenario:
The client had completed on the purchase of his new home in the last month and wanted to remortgage immediately to recoup savings used for the purchase.
Challenges:
Many lenders require applicants to have owned the property for at least 6 months before they are able to remortgage. Also, finding a lender who accepts funds to be raised to recoup savings put into the purchase can also be challenging.
To make the case trickier, as a pilot for a commercial airline, he was receiving 90% of his normal salary due to covid restrictions however this was due to go back to normal shortly.
Solution:
The broker found a bank who could offer the loan required without a 6 month ownership required. The lender was satisfied with the clients income as he was a very experienced pilot and could show his income was due to return to normality in the next few months. As he earned more than £75,000 per annum, the bank were able to offer 5.5x income multiple which meant the loan was affordable even on the reduced salary.
Key figures:
Property value: £1.4 million
Loan amount: £900,000
LTV: 65%
Repayment type: Capital repayment
Product type: 2 year tracker
Interest rate: 1.99% above BOE base rate (currently 0.1%)