Obtaining a self-build mortgage for client upsizing their family home
The situation?
I was contacted by a client who had been living in a property for the past 5 years with their family.
With the family now expanding, they wanted to extend the house to increase the space. They managed to obtain planning permission to carry out major refurbishment works to the property, which meant for a period of time they would have to move out.
The client was looking to repay the current mortgage (£415,000) and borrow an additional £430,000 to carry out the work. However, the property was valued at just over £800,000 so I needed to find a lender that would take into account the added value of the finished refurbishment works once complete.
The complication I was facing with this case was that high street lenders would not allow them to borrow what they needed to complete the total works. Without wanting to top up funds themselves, this meant that they wouldn’t be able to do the full planned refurbishment and remodel simultaneously.
Knowing what the client wanted to achieve, I thought the most suitable product for them would be a self-build mortgage. I set about contacting a number of self-build lenders that I had previously worked with to see who could offer the most competitive rate combined with the loan desired. Obtaining as much as possible for the client would allow them to repay the current lender but also raise the full funds for the works.
On a self-build mortgage application, lenders will typically require much more information than a traditional mortgage application, such as architectural drawings, planning documents and a full schedule of the works required. For this application, I started talking to the client around 6-9 months prior to completing on the funding.
As part of the process, I worked closely with my client to ensure that we could collate and provide all the information to the lender upfront. This additional admin work at the beginning meant we had the best chance of success with the funding.
The solution?
Using my established contacts at a specialist self-build lender, I was able to explain my client’s situation and negotiated with them to move outside of their normally policy to allow a major refurbishment.
In doing so I achieved a competitive variable rate on an interest only basis to keep costs as low as possible. The facility also had no early repayment charges, allowing us to remortgage to a more competitive facility as soon as the works were complete.
By securing this type of finance, the clients were able to complete the full works to the property in one go, meaning that the level of disruption to their family was kept to a minimum.
The client was delighted with the outcome of borrowing the full loan amount required, and complete the full works to the standard they wanted in one go. They look forward to returning to LDN Private Clients for their remortgage.