UKMB Yorkshire
Whole of Market Broker โ Residential, Buy to Let, Commercial Finance, Development Finance, Bridgin
#wholeofmarketbroker #UKMBYorkshire #mortgages #BTL #commercialfinance #residential #bridgingloan #propertyfinance
๐๐ฎ๐๐ญ๐ข๐จ๐ง ๐๐ฎ๐ซ๐๐ก๐๐ฌ๐ ๐ฏ๐ข๐ ๐๐ซ๐ข๐๐ ๐ข๐ง๐ ๐ฅ๐จ๐๐ง โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ:
The client was self-employed and had a Buy to Let portfolio. Due to various factors including the Coronavirus pandemic, his income had fluctuated quite a lot over the past few years.
๐๐๐๐ง๐๐ซ๐ข๐จ:
The client had purchased a property at auction and was under a very tight timescale to complete the funding necessary.
The property purchase was a leasehold property with a very short lease remaining which would require extending before or at completion making the timescales even tighter.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
We looked at the options for a standard buy to let purchase mortgage and provided details to the client, advising the client that it was unlikely complete within the necessary timescales. This would mean he would have been at risk of penalty charges or at worst, losing the property completely along with any deposit and fees already paid.
After many discussions the client opted for an option we secured for a bridging loan with one of our specialist lenders who are able to complete on the deal within a short timeframe. The plan would then be to remortgage away from the bridging loan to a conventional buy to let mortgage after the necessary 6 month period of ownership had elapsed.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ:
Even when the route of conventional mortgage does not seem viable, being a whole of market broker means we have the knowledge and tools to find suitable funding within tight timeframes for our clients.
๐๐๐ฌ๐ข๐๐๐ง๐ญ๐ข๐๐ฅ ๐๐ฎ๐ซ๐๐ก๐๐ฌ๐ ๐ฐ๐ข๐ญ๐ก ๐
๐จ๐ซ๐๐ข๐ ๐ง ๐๐ฎ๐ซ๐ซ๐๐ง๐๐ฒ ๐๐ง๐๐จ๐ฆ๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ ๐ถ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ: ๐งโ๐ผ
The clients were husband and wife. The husband was the sole earner, and on a very good income. The difficulty arose with the currency he was paid in โ Saudi Dirhams, as he was working for a Saudi company.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ: ๐
The clients had saved a good deposit and had a very low credit card use, along with no bad credit or dependants. The main credit they had was a large car loan which had recently been arranged. The issue we were facing was that lenders who accept foreign income sometimes take a haircut (reduce affordability) to account for any potential future fluctuation in the currency exchange rate.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง: ๐ญ
Being a whole-of-market Mortgage Broker, we have the knowledge to know that some lenders will accept foreign income for UK based residents to purchase a residential property in the UK. We approached these lenders to make sure we could cross reference the best deal with the lender that accepts the specific currency in question. They were happy with the case, and the affordability worked easily.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ: ๐๏ธ
It is possible to use sole income that is earned through a company outside of the UK, in a foreign currency.
๐๐๐ฒ ๐ญ๐ก๐ข๐ง๐ ๐ฌ ๐ญ๐จ ๐๐จ๐ง๐ฌ๐ข๐๐๐ซ ๐๐จ๐ซ ๐๐จ๐ซ๐๐ข๐ ๐ง ๐ข๐ง๐๐จ๐ฆ๐ ๐
โพ Some lenders will accept foreign currency, it can vary lender to lender which currency they will accept.
โพ Some lenders will apply a haircut to the amount to account for future changes.
โพ Some lenders will allow you to live in the UK but work for a foreign company.
๐๐ซ๐ข๐๐ ๐ ๐ญ๐จ ๐๐ซ๐ข๐๐ ๐ ๐๐๐๐ข๐ง๐๐ง๐๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ:
The clientโs objective was to remortgage his Consumer Buy to Let property to repay the temporary Bridging Finance in place. They had already taken an extension to repay the Bridge and were running out of time. The bridging lender was threatening to take action to force sale of the property due to exceeding the term of the bridging finance, therefore client needed to move fast.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
On assessing the application, the bridging finance in place was a cross-charge over two properties, with most of the amount to be repaid secured against the clientโs Consumer Buy to Let property. The affordability of the remortgage was failing, so it was agreed with the bridging company that the client could repay the charge against the Consumer Buy to Let property for ยฃ455,000, which would leave the remaining funds as a charge against the clientโs residential property.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
The remaining funds of the bridge remained as a charge against the clientโs residential property under new bridging terms, allowing the client to take another 12-month bridge with the same bridging lender. This reduced the risk of the bridging lender forcing a sale of their residential property.
A remortgage for ยฃ671,000 was secured for the client against the Consumer Buy to Let property and the affordability was self-funding from the rental income. ยฃ455,000 was used to repay the bridge and the remaining funds to repay the existing mortgage balance.
The clientโs income would have increased substantially by the time the bridge was due to be repaid on the residential property which helps the client to remortgage the residential property to repay the remaining balance of the bridge.
The customer was then able to keep both properties and force of sale was eliminated.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ:
Even when our clients feel they have no options available to them other then the resale of properties we can assist as a whole of market Broker and find solutions for some of the most complex cases.
๐๐ข๐ฑ๐๐ ๐๐ฌ๐ ๐๐๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐ง๐ต๐ฒ ๐๐น๐ถ๐ฒ๐ป๐:
The client was a retired Doctor who owned an unusual property which had a combination of Commercial, Residential and also Buy to Let units within the same building. He also owned another Buy to Let property in his portfolio. The clientโs Income was predominantly from his pensions and also from land and property owned.
๐๐๐๐ง๐๐ซ๐ข๐จ:
The client wished to extend the subject property to allow for further use of the commercial element, thus significantly enhancing his rental income. He wished to refinance all current loans and raise capital toward the planned extension works. However, due to the multiple types of property contained in the single title his current lenders and high street lending options were not available to him.
๐ง๐ต๐ฒ ๐ฆ๐ผ๐น๐๐๐ถ๐ผ๐ป:
We sought out a specialist Commercial Lender who was able to accommodate the multiple different uses within the single freehold title, whilst also still ensuring the interest rate was remained as competitive as possible.
We discussed in detail with the Lender upfront regarding their specific criteria particularly towards the minimum and maximum size of each unit within the overall freehold and also confirmed this with the client prior to our application to avoid any potential pitfalls.
๐ฆ๐๐บ๐บ๐ฎ๐ฟ๐:
Mixed use properties require specialist Lenders, since High Street Lenders do not lend on this type of property, nor do a number of Commercial Lenders, especially when criteria such as single freeholds, capital raising and building works all apply. In instances such as these, an experienced and knowledgeable Commercial Finance Broker have all the required expertise to be able to secure the best deal and rates available, as well as crucially ensuring a successful completion to the refinance.
๐๐ฎ๐๐ฒ ๐ฆ๐๐๐ฑ๐ - ๐ฅ๐ฒ๐๐ถ๐ฑ๐ฒ๐ป๐๐ถ๐ฎ๐น ๐ฅ๐ฒ๐บ๐ผ๐ฟ๐๐ด๐ฎ๐ด๐ฒ ๐ณ๐ผ๐ฟ ๐ฑ๐ถ๐๐ผ๐ฟ๐ฐ๐ฒ
๐ง๐ต๐ฒ ๐๐น๐ถ๐ฒ๐ป๐:
Our client was re-mortgaging their marital home as part of divorce proceedings. During the divorce, they were renting in private accommodation and then once completion of the remortgage had taken place, the subject property would become the clientโs main residence and his ex-wife would move out.
The client was unable to wait for the divorce to be finalised as they required the mortgage offer in place as requested by the courts. The ex-wife was unable to afford to keep the marital home and the client didnโt want to lose the property. The client was self-employed and the income evidenced for the last 12 months was failing affordability with many lenders.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
Upon assessing the application, we identified that part of the land had some commercial elements, therefore we were limited on lenders that we could approach on residential mortgage terms. Due to the constraints of the divorce proceedings, the client was unable to wait for the title to be amended and split correctly, separating the commercial and residential elements to the property. It became evident the client required a lender that would work on projected figures.
๐ง๐ต๐ฒ ๐ฆ๐ผ๐น๐๐๐ถ๐ผ๐ป:
A first mortgage was raised for the client. The lender we recommended for the client was happy to assess the application taking the clientsโ current circumstances into consideration and the lender was happy to assess the remortgage on their residential terms. This then allowed the client sufficient time to remortgage on better terms later and to split the title once the divorce settlement and first charge mortgage had been finalised.
The mortgage lender was also happy to use clients projected income figures. The client completed an Accountants Certificate with an explanation from the accountant as to why the income had increased. The selected lender was happy to proceed, and the client was able to keep their marital home.
๐ฆ๐๐บ๐บ๐ฎ๐ฟ๐:
Divorce proceedings are naturally usually very challenging and stressful for all parties involved and even more so when a marital home is involved. However, working a Mortgage Broker who has experience in being dealing with these complex and sensitive matters removes a significant amount of stress and enables specialist lenders to be sourced who understand the issues.
If youโre going through a divorce and are seeking some free advice and guidance regarding how the marital home could be potentially remortgaged &/or other properties being purchased with the divorce proceeds, then contact us today to speak directly with one of our CeMAP certified Mortgage Advisors
๐๐๐ฌ๐ข๐๐๐ง๐ญ๐ข๐๐ฅ ๐๐๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ
The clients had a large portfolio of properties within their local area who were wanting to raise funds for ongoing property purchases and building projects that they had lined up. Both applicants were mainly self-employed, with one applicant having income from employment.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
Due to ongoing investment plans, they needed to raise funds from their existing properties. The issue was, most of their properties had a mortgage which were on fixed rates, meaning that if they were to raise funds via remortgaging, they would have Early Repayment Charges (ERCs) to pay. The clientโs current residential property however was unencumbered (no mortgage) therefore this was going to be the most cost-effective route for raising the required funds.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
After gathering the clientsโ self-employed tax documents covering the past 3 Years, we were able to carry out a detailed Affordability Assessment to see how much they would be able to borrow. Initial affordability calculations showed good client affordability, however a lot of lenders also take into account the Buy to Let Mortgages in the background and run an affordability assessment on those as well. Although the mortgages were covered by the monthly rental income, the way Lenders assess this can often reduce the amount they are willing to lend on the residential mortgage. Additionally, some Lenders do not lend to applicants who have above a certain number of investment properties.
After sourcing a Lender who could provide the clients with the required funds on a competitively low interest rate, the application was submitted and proceeded to offer within just two weeks. The funds have subsequently been released and in turn we have assisted the client with obtaining an additional mortgage for the purchase of another Buy to Let property.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ:
When trying to raise funds against your residential property, every Lender has different criteria on which those funds can be used, as well as different assessment on affordability of background income. Therefore, it is crucial to ensure you speak with an experienced Mortgage Broker who understands the Lendersโ criteria to save you time and money when trying to secure a residential remortgage.
๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ข๐๐ฅ ๐๐ฎ๐ซ๐๐ก๐๐ฌ๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ:
The clients were experienced landlords looking to purchase their first semi commercial property. They had a large amount of outstanding credit in their personal names but a good amount of net worth and equity across their residential and investment properties. Both applicants are self-employed with a clean credit history.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
The property consisted of two commercial units on the ground floor and a large flat above producing a yield of 11.5%. They also owned several leasehold flats in the same area which are above a separate commercial unit, however the freehold to these flats was under the commercial title. The client had negotiated the purchase of this commercial unit so that they could obtain the freehold, however as the commercial unit was vacant and very small capital value, sourcing a lender to provide borrowing on the unit would not be an option on its own.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
After already sourcing a commercial lender for the semi-commercial purchase, we were able to get the lender to add the individual commercial unit onto the same mortgage to allow the client to purchase both properties under one loan. This not only secured the client two new commercial investment properties, but also the freehold of the existing residential investment properties. A 75% LTV mortgage was secured on an interest only basis over 25 Years.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
The commercial investment market has grown in popularity in recent years, however there are a lot of complexities involved with the mortgage process, and most lenders will only lend via Commercial Mortgage Brokers. If you are in the market for a commercial property, or are looking at remortgaging an existing property, speak with our experienced brokers today who can offer years of Commercial lending experience to help you on your investment journey.
๐๐ป๐๐ผ๐ถ๐ฐ๐ฒ ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ฒ / ๐๐ฎ๐ฐ๐๐ผ๐ฟ๐ถ๐ป๐ด โ ๐๐ฎ๐๐ฒ ๐ฆ๐๐๐ฑ๐
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ:
The client is a Freight Forwarder business and has traded as a Limited Company for the past 7 years, with a healthy turnover of circa ยฃ600,000 per annum.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
The client has had consistent cash flow issues due to their providing standard payment terms of 60 days to their customers for invoices, in addition to experiencing occasional late payments. Conversely the operating costs of the business, being predominantly wages, needed to be paid either weekly or monthly, therefore presenting an overall cashflow issue.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
The client was initially presented with several Business Loan options we managed to secure for them, although they ideally wanted a greater degree of flexibility in their borrowing. We therefore searched the whole market for an Invoice Finance facility for them as this was deemed the most suitable solution for their needs.
We managed to secure a ยฃ100,000 Invoice Finance Facility which will enable them to be paid advances on their outstanding invoices up to the facility limit over the coming year. The facility works with the lender deducting a set percentage as their fee, once the invoice has been paid by the clientโs customers.
This solution and Invoice Finance Facility will greatly aid the clientโs cashflow when they need it most and it wonโt be restricted by any rigid monthly repayment terms.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ:
Invoice Finance / Factoring is designed to increase a companyโs cashflow and fund growth. It is a relatively quick method for accessing business finance against a companyโs account receivables.
Whilst personal and business credit may prevent access to Business Loans in some cases, Invoice Factoring Lenders are more focussed on the ability of a businessโs clients payment history.
The facilities put in place are invariably Unsecured options which donโt require security over and above the invoices themselves, whilst also removing the time-consuming headache of chasing payments, since these now become the responsibility of the lending partner.
๐๐๐ฌ๐ข๐๐๐ง๐ญ๐ข๐๐ฅ ๐๐๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐ & ๐๐จ๐ฅ๐ข๐๐๐ฒ ๐๐๐ญ ๐๐ฎ๐ซ๐๐ก๐๐ฌ๐ โ ๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ
๐๐ก๐ ๐๐ฅ๐ข๐๐ง๐ญ:
Our client was a UK citizen who already owns one Holiday Let property as well as his own residential property and was about to complete on another Holiday Let property. The client works as a Train Driver on a good income, with both basic plus overtime pay.
The client had Bridging Finance in place against his own residential property and used the funds to buy his first Holiday Let months earlier. He was wishing to now pay off the more expensive Bridging Finance (โexit the bridgeโ) with a remortgage on his residential home as well as secure a new Holiday Let mortgage for the new purchase.
๐๐ก๐ ๐๐๐๐ง๐๐ซ๐ข๐จ:
The client had sufficient equity in his residential property to remortgage and release sufficient equity for the deposit of the new Holiday Let property. However, before contacting us, the client had been trying for several months with other Brokers to secure the funding but had been unsuccessful. He has a high debt to income ratio and this was most likely the reason he had been struggling as he needed the equity from his residential to act as the deposit for the new Holiday Let.
๐๐ก๐ ๐๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง:
Being a whole-of-market Broker, we have the knowledge to know that some Lenders internal credit scoring systems allow an application to be considered even where a client is highly โgearedโ โ i.e. high debt to income ratio. So long as the credit score passes and the client have maintained their credit agreements to a satisfactory level, certain Lenders will still consider an application. In this particular instance, we were able to use a High Street Lender who accepted the clientโs residential remortgage.
For the Holiday Let purchase, since the client already owned one and has a good income, we were able to secure him the best deal on the market for this, which fitted the Lenderโs criteria perfectly. It was also beneficial that the client already has the onward purchase resolved as that can often hold up residential remortgages, as lendersโ wish to know the specific details etc.
๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ:
When trying to remortgage a clientsโown residential home, it can be often be difficult when the client owns multiple properties and has a high debt to income ratio. However, options do exist, especially if all existing credit agreements have been well maintained.
๐๐๐ฒ ๐ญ๐ก๐ข๐ง๐ ๐ฌ ๐ญ๐จ ๐๐จ๐ง๐ฌ๐ข๐๐๐ซ ๐๐จ๐ซ ๐๐๐ฌ๐ข๐๐๐ง๐ญ๐ข๐๐ฅ ๐๐๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐๐ฌ ๐ฐ๐ก๐๐ง ๐ซ๐๐ข๐ฌ๐ข๐ง๐ ๐๐ฎ๐ง๐๐ฌ ๐ญ๐จ ๐๐ฎ๐ฒ ๐๐ง๐จ๐ญ๐ก๐๐ซ ๐ฉ๐ซ๐จ๐ฉ๐๐ซ๐ญ๐ฒ:
-Debt to income ratio.
-Good payment history.
-If you donโt have an onward purchase, most residential lenders will want to see one or at least know the details.
-If you already own a Holiday Let, and earn over ยฃ30k, you are in a good position with Lenders to be able to purchase another Holiday let.
-Just because you have had setbacks or issues, doesnโt mean itโs not possible โ you just need to work with an experienced Broker.
Government considering 50-year mortgages that children can inherit
https://uk-mortgagebroker.co.uk/government-considering-50-year-mortgages-that-children-can-inherit/?fbclid=IwAR29GwgTCKow-vs2nQE_n2HgsMAoXLeRC0rw6icOf6ZFEX6J2Vj1RZ71bCc
Government considering 50-year mortgages that children can inherit The government is considering plans to offer homeowners longer mortgages, including 50-year deals, that can be passed between generations
๐๐
๐ฝ๐ฎ๐ ๐ฅ๐ฒ๐๐ถ๐ฑ๐ฒ๐ป๐๐ถ๐ฎ๐น ๐ ๐ผ๐ฟ๐๐ด๐ฎ๐ด๐ฒ โ ๐๐ฎ๐๐ฒ ๐ฆ๐๐๐ฑ๐
๐ง๐ต๐ฒ ๐๐น๐ถ๐ฒ๐ป๐:
Our client is an Expat working as a Sales Director and living in Hong Kong until recently when he moved to Japan. The client works for a UK based multi-national company and earns good income with most of his overseas expenses also being paid by the company.
๐ง๐ต๐ฒ ๐ฆ๐ฐ๐ฒ๐ป๐ฎ๐ฟ๐ถ๐ผ:
The Client was seeking an Expat Residential Mortgage to enable him to purchase a property for him and his family to live in upon their upcoming return to the UK. The client had a handsome 40% deposit.
๐ง๐ต๐ฒ ๐ฆ๐ผ๐น๐๐๐ถ๐ผ๐ป:
Being a whole-of-market Broker, we could easily offer standard Expat mortgage rates and terms to this client as we have access to all of the Expat Mortgage Lenders, including the specialist lenders.
However, through our specialist Expat knowledge and experience along with the clientsโ strong credit profile and large deposit, we were actually able to offer him standard UK Resident (non expat) mortgage rates, even though they were still living in Japan. This was an excellent outcome for the client as the rate secured was an overall 1.1% cheaper than the cheapest Expat market rate that the client was eligible for.
๐ฆ๐๐บ๐บ๐ฎ๐ฟ๐:
When looking for a โBuy to Liveโ property it is important to remember that a family member will have to occupy the property when the mortgage holder is abroad, as the property cannot be left vacant since this would invalidate the buildings insurance.
๐ฒ๐๐ ๐๐๐๐๐๐ ๐๐ ๐๐๐๐๐๐
๐๐ ๐๐๐ ๐ฌ๐๐๐๐ ๐ด๐๐๐๐๐๐๐๐:
-Certain currencies will not be accepted by Lenders- usually if the currencies are considered volatile.
-Expat Mortgage Interest Rates are usually higher than standard (UK Resident) mortgage rates.
-Lendersโ Arrangement Fees are usually a percentage of the loan rather than a flat / fixed fee.
-The client/s will need an active bank account and credit footprint in the UK.
-Loan to Values are typically lower.
*Business/Property Investor Finance Solution*
-Revolving credit facility that allows Businesses/Property Investors to draw (and repay) funds secured against their property portfolio
-Up to 5 years flexible line of credit
-Up to 75% CLTV (Cumulative Loan to Value)
-Borrow as a limited company
-Secure on a main residence or buy-to-let (1st, 2nd or 3rd charge basis)
-No early repayment charges
-In year 6 onwards, the outstanding balance will convert to a term - loan for the remainder of the term.
*Credit Facility Purpose*
Business Finance
Fund an extension
Repairs and refurbishments
Finance a deposit
Purchase a new property
Purchase an auction property
Following recent interest rate rises many clients are worried how high rates will be when their current fixed rates expires.
If you are thinking of remortgaging and want a free quote/consultation or a free portfolio review. Remortgaging now could potentially save you thousands each year with rates likely to increase.
2 year fixed rates starting from 2.10%%
3 year fixed rates from 2.39%
5 year fixed rates from 2.19%
10 Year fixed from 2.45%
As a whole of market broker we will source the best deals on Personal Name or Ltd Company.
*Regulated Bridge โ Case Study*
The Client:
A client was looking to purchase a property via auction which came with a strict completion deadline. As the client was a foreign national, sourcing a lender able to lend could have been a difficult process.
The Scenario:
As specialists in bridging as well as foreign national mortgages, we were able to find a lender who would consider the case within 24 hours. The value of the property was ยฃ200,000 with the client providing a deposit of ยฃ80,000.
The Solution:
The first thing we did was to source a viable exit strategy for the client to ensure they would be able to clear-off the bridging loan โ also known as โexit the bridgeโ. After referring the case to several suitable lenders, we provided the client with two competitive remortgage options. This provided the client with the peace of mind they required to meet the affordability criteria to be able to pay off the bridging loan and also meeting the main requirement for the bridging lender.
We then requested all packaging requirements in advance from the client to ensure that the lender was able to review the case as quickly as possible so that we could ensure the legal work could be carried out without any delays.
After meeting the completion deadline, we were than able to focus on the re-mortgaging of the property so the client could recoup the interest costs of the bridging loan, as well as having the security of knowing they have a long-term mortgage on the property.
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Unsecured Business Loan - Case Study
First Time Buyer โ Self-employed Partner with No Accounts
The Client:
We were recently successful in helping a client buy their first home, who had recently become a Partner within a GP practice.
The Scenario:
Typically, when you become a Partner of a GP practice you a treated as โself-employedโ. A Partner will take a share in the profits (and losses) of the practice. Compared to a salaried (employed) GP who is employed on a contract, on a basic salary by the practice.
This can pose an issue when looking to take out a mortgage as typically lenders will need at least 2 years history in that role, being self-employed. To a Lender anything less can be deemed risky. Due to the nature of being self-employed, income will typically fluctuate. As a result, Lenders risk appetite is high as they need to be sure that the business can prove a sustainable track record of earnings by way of 2 years accounts.
Therefore, on the face of it our client wouldnโt be able to get a mortgage having only just joined the practice and not having the standard track record lenders demand.
The Solution:
However, this wasnโt the case for our client. This is where our expertise came into play, being a Specialist Self-Employed Mortgage Broker we were able to source a market leading deal with a well-known High Street Lender.
All the Lender required instead of the typical 2 years accounts, was a letter from either the head partner OR Practice Accountant detailing the level of projected drawings the client was expected to receive for the year. In addition, they also required to see the detailed Practice Accounts to back up the letter.
To make things even better, we were able to obtain a ratio of 5.5 x income and also up to 90% loan to value, which represented an excellent deal for the client who was delighted with this outcome.
Summary:
Being self-employed for less than 2 years doesnโt necessarily mean that you are unable to get a mortgage. Working with a Specialist Mortgage Broker that fully understands the market and what options are available to self-employed persons such as Partners, GPs & Contractors etc; is the best way of not only ensuring you can successfully secure a mortgage, but equally that you can achieve the highest loan to value and income multiples.
Bridging Loans
- Purchase a property at auction
- For short-term refinancing
- To continue a property purchase if your sale has fallen through
- To refurbish, renovate or redevelop a property
- Business working capital
- To buy land for development
Monthly Interest Rate
0.49% to 0.95%
First Charge LTV 70% (second charge 65%)
Loan Amount ยฃ50,000 min to ยฃ10,000,000 max
Term (Months) 1 min to 24 max
Monthly Interest Rate
0.48% to 0.90%
First Charge LTV 75% (second charge 70%)
Loan Amount ยฃ125,000 min to ยฃ25,000,000 max
Term (Months) 1 min to 36 max
Secured Business Loan Case Study
The Client:
The client is a payroll services business seeking ยฃ250,000 โ ยฃ350,000 of working capital to facilitate ongoing growth of their business. The client wanted to be able to have a facility that would allow them to grow the business over a 3 year period to invest in marketing, new staff and upgrading their office to accommodate the increased demand for their business. The client had no business assets so to speak, however they did have assets in the background that could be used as security to strengthen the case.
The Solution:
As the client was looking for a large loan, it was important to ascertain what assets were available to be used as security and also understand what the turnover level was for the client. The clientโs business had shown positive growth over the last 3 years, evidencing a high level of turnover and sufficient amount of net profit which was favourable for the Lenders.
The client had enough equity in two properties in the background to place an equitable charge over both of them.
We were able to secure the customer 2 finance offers:
a) Either an unsecured loan option of ยฃ150,000 initially, or
b) ยฃ217,000 if using the two properties in the background as security.
Although the business could support a higher loan amount, since the business had just one sole Director, the preferred Lender caps their loan sizes due to their only being one Personal Guarantee.
Whilst the initial loan was not as high as initially hoped, however the selected Lender provides flexibility โ i.e. so long as the client maintains regular repayments over a 3-6 month period, then the Lender can offer further โtop-up loansโ to allow the loan to grow alongside the business. These funds will allow the company to grow as per their 3-year plan and subsequently, with the option of the top-up loan, provide a suitable longer term facility to support the business as it expands.
In terms of timescales, from the initial submission of the application to the lender, it took just 9 working days for the funds to be released to the client, who was delighted with the excellent terms we secured for their business.
Key Points to Consider:
As a general rule, if the client has assets or is a Homeowner, financial providers can often lend between 15% โ 25% of the business turnover.
Please keep in mind that these are only broad guidelines. Each case is looked at individually and treated on its own merits.
********** Adverse Credit - Remortgage Case Study ***********
The Client:
Our client wanted to remortgage their primary residence, which was currently mortgage-free. They needed to raise money to buy a new vehicle and also to send their daughter to university.
The Scenario:
The client had already approached several other brokers, all of whom were unable to assist him. The client had recently missed several mortgage and unsecured loan payments in the previous 12 months therefore he had what is referred to โAdverseโ (bad) Credit.
Generally most lenders will outright decline a mortgage application if there have been any missed mortgage payments in the last 12 months. The client could have waited until the payments were more than a year old, but they wanted the money right away.
The Solution:
We started with a well-known High Street Lender because they didnโt have any specific criteria for missed mortgage payments and considered it based on credit score. Unfortunately, the case was rejected due to not meeting the minimum credit score required. The clientโs credit report was unaffected because the lender just performed a โsoft check,โ which leaves no trace.
The next best option was to contact a Lender that specialises in providing mortgages to clients who had previously experienced credit problems. The Lender approved the mortgage application because the arrears had been paid in whole and the client could show that no payments had been missed in the previous six months. This loan was available with a loan-to-value ratio of up to 85%.
Summary:
Adverse credit doesnโt instantly dismiss the ability to being able to get a new mortgage. Specialist Lenders exist in the market for circumstances when this happens and they are willing and keen to work with clients all the time. However, access to these Lenders is invariably restricted to clients introduced firstly via Brokers and secondly, typically only โwhole-of-marketโ Brokers work with the Specialist Lenders such as these.
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