Holiday let purchase and remortgage for company director
The situation?
Just prior to the COVID-19 outbreak, LDN Private Clients was approached by a very successful company director looking to remortgage their residential property at a better rate than they were paying at the time. During the initial conversations, the client also revealed a medium-term ambition to purchase an additional property, a stunning holiday let in Devon. However, at the time we spoke, this was nothing more than a pipedream as they didn’t have the equity accessible to put down a sizeable deposit.
Whilst the residential remortgage was a straightforward arrangement, the client believed they were unable to secure a holiday let mortgage because they felt they had an insufficient deposit, but this wasn’t strictly true. They were unaware that at the point of applying for the remortgage, we could also look to release some additional money from their home to boost the deposit for the purchase of their new holiday home.
The solution?
After talking my client through this process, we approached a lender who was happy to put the wheels in motion. Not only was the client able to release enough funds to majorly boost the deposit, but they now had the affordability to purchase a more expensive property at a much better rate as he was operating in a better loan-to-value (LTV) bracket.
In fact, once the client was happy to push ahead with the holiday let purchase, their offer came out two weeks before the pandemic took hold. On the actual day of lockdown, they agreed with the seller that they would pay £50,000 less off the value of the property so long as they exchanged by the end of the week! Working efficiently, we took this new information to the lender and worked closely with them in order to redo the figures, getting them to reagree to the terms and produce a new offer – all within the space of one day!
In the end, we secured a fantastic remortgage facility on a five-year fixed rate at 1.46% with the majority of the loan on an interest only in order to keep payments down. This suited the client as the lockdown was in effect and they were unsure how the holiday let would fare from the off. An interest-only arrangement allowed for more disposable income with which to bolster the deposit for the holiday let purchase.
The client was thrilled with their agreed remortgage rate as it was far more competitive than what they were paying – so much so, that despite borrowing the extra money from the lender, the mortgage was still cheaper as the rate had come down so much.
In regard to the purchase, the holiday let mortgage was agreed at less than 2.5% on a two-year fixed rate. What made this case such a brilliant one was that it highlights what is possible when you use a specialist finance broker to act on your behalf. We were able to get the client an outcome that they thought was out of reach, by doing something they didn’t know was possible – both saving money and making their holiday home dreams become a reality.
What did the client say?
“Anthony was outstanding – flexible in his approach and imaginative about how to put together the best deal for me. A real pleasure to do business with.”