An RAF commander was moving onto base into tied accommodation, but wanting to buy a new residential property nearby. He did not have sufficient income to buy the new property outright, particularly as he needed additional funds to carry out work on the property.
We recommended that he remortgaged the current main residence to 75% on a ‘buy to let’ basis, and used some of the unlocked equity as a 25% deposit on new property, also taking a 75% ‘buy to let’ mortgage out on that property. His total borrowing was £1.088 million on property valued at £1.56 m (LTV slightly below 70%). The rate offered by the lender was a 2 year tracker at Bank of England Bank Rate plus 3.6%, equaling a payment rate of 4.1%. (APR 4.8%* - the overall cost for comparison)
The lender was happy with 2 properties within a few miles of each other and with the client not owning his main residence. We worked closely with the property agent and lender to get the rental figures required and offers out to meet the exchange deadline and to reassure the vendors that all was proceeding smoothly.
The client paid arrangement fees of £3,000 (being £1,500 per property).
*APR (the overall cost for comparison) calculation based on a 2 year tracker term, interest only mortgage with £3,000 arrangement fee, legal and valuation fees of £5,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.