Let to Buy - £615,000 loan to buy a country cottage without selling a London property

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Proposition

Our clients had been looking to move from London to the country for some time. They found their ‘perfect country cottage’, on the market at £500,000 but unfortunately there was another buyer who made a cash offer at just under the asking price. The clients’ London property was valued at £550,000 with a £100,000 mortgage, but was not yet on the market.

Solution

We met the clients and they were delighted to hear that finance could be arranged quickly which would allow them to move forward with an offer. We needed to secure a total loan of £615,000 to cover the new mortgage, the existing mortgage and stamp duty.

The maximum which could be arranged on a residential mortgage was £235,000, using a flexible product which would allow the clients to reduce the mortgage without charge when the London property was sold. The rate obtained was a lifetime tracker rate of 3.19% plus Bank of England Bank Rate (currently 0.5%) giving a payment rate of 3.69%. (APR 3.8%* - the overall cost for comparison). The mortgage was for a 15 year term on an interest only basis and the clients paid a lender’s arrangement fee of £1,499. Early repayment charges apply only on full redemption of the mortgage, not partial repayment.

The rental value of the London property was £1,900pcm, which secured a Buy to Let (BTL) mortgage of £380,000 with a specialist lender. The rate obtained was a 1 year tracker rate of 4.04% plus Bank of England Bank Rate (currently 0.5%) giving a payment rate of 4.54%. (APR 5.3%* - the overall cost for comparison).The mortgage was for a 10 year term on an interest only basis and the clients paid a lender’s arrangement fee of £11,400 (3% of £380,000). Early repayment charges of 3% of the loan amount apply for 1 year.

*The Residential Mortgage APR (the overall cost for comparison) calculation based on a 15 year term, interest only mortgage with £1,499 lender’s arrangement fee, legal and valuation fees of £1,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.

*The BTL Mortgage APR (the overall cost for comparison) calculation based on a 10 year term, interest only mortgage with £11,400 lender’s arrangement fee, legal and valuation fees of £3,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

© Private Finance Limited, 2019. Private Finance provides independent mortgage advice and arranges individual mortgage solutions for clients. Private Finance is a trading style of Private Finance Ltd, 29 Lincolns Inn Fields, London, WC2A 3EG, registered in England no. 3855776 and its Appointed Representatives. Private Finance Limited is authorised and regulated by the Financial Conduct Authority (FCA registration number 310566).

Private Finance Ltd is rated 4.95 stars by Reviews.co.uk based on 616 merchant reviews

4.95 / 5 Rating
616 Reviews
I always feel in safe hands when seeking advice from Julian. He always seem to find the right product for my circumstances, particularly when the information I have doesn't seem to fit into all the relevant boxes.
The team is excellent. Tim has an unerring ability to come up with deals that can't be found anywhere else and his team, including Maniksha, is superb at tying up all the loose ends and driving the deal to completion. And they got me some money back!
Chris Sykes was great at getting lending sorted. And dealing with surveyors and getting a retention lifted before completion. Wouldn’t hesitate to recommend.
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