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Case Study: Doctors Seek to Let Out Existing Property And Purchase Dream Home

Proposition

Our clients – two doctors – wished to let out their property and purchase a second, larger one, into which they planned to move once the necessary financial arrangements had been made. In order to do this, they hoped to take equity out of their first home and use it to put down a deposit for their second. They were particularly set on the idea of keeping their current home while purchasing their second, and this presented them with a number of difficulties, because the mainstream lenders with whom they had been dealing up to this point were unwilling to offer them a loan of the required size. There were a number of reasons for this: firstly, because both of our clients worked for the NHS while doing private practice work, and this left them each with two primary sources of income, one of which was classed as employed, one as self-employed. Mainstream lenders were unwilling to incorporate the entirety of our clients’ incomes when calculating affordability, which severely reduced the size of the loan for which they were deemed eligible. In addition to this, our clients were committed to paying £3k of school fees per month.

Solution

When they came to us, our clients had £328k equity in their first home, which had been valued at £550k. The second home they wished to purchase was worth £760k. We needed to find a lender who was willing to accept both of our clients’ incomes as primary, to take both incomes in full, to accept the £3k school fees per month, and who was amenable to top-slicing, so that we could take equity out of the first mortgage and put it towards the deposit for the second. We were able locate lenders who met all of these requirements, and our clients were able to achieve their desired outcome.   

Lending Facility

We advised our clients to take £114k out of their first home and put it down as a 15% deposit for their second. We then arranged two five-year fixed mortgages: the first was a let-to-buy interest-only mortgage on the first property, with a loan size of £336k, a rate of 2.44%, and mortgage payments of £685 per month. The second was a standard 85% LTV residential mortgage with a loan size of £646k, a rate of 2.14%, and mortgage payments of £2786 per month. The rent for first of these properties had been valued at £1400, which meant that it would cost them around £2k per month to run both properties.

Case Study: Doctors Seek to Let Out Existing Property And Purchase Dream Home

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Mortgage advance received today. The service was simply great. I tried approaching couple of banks directly prior to contacting private finance but after going through PF I felt it was money well spent and prices was simply hassle free. The service and advice was simply great. Being a first time buyer, I had several questions. Anuj was my advisor. This rating is mostly for his service. He was very patient in explaining details and options I had. With limited validity on my visa my colleagues told me that, I will have only one or two options and I din't have a great experience directly dealing with banks. Anuj got me better mortgage options given my situation. He was very responsive and friendly. I also had some target in terms of timelines due to my vacation. He made sure that everything was sorted out before I left for vacation. Great experience. I would definitely recommend. Special thanks to Anuj for amazing support.
I returned to Nathan when renewing my mortgage as he had given me such great service in the past. He has been extremely helpful both in securing a good deal and making my options very clear. I would highly recommend him.
Fast and efficient service from Michelle Clack at Private Finance. She quickly understood our remortgage requirements and came up with some good solutions. The process was efficiently managed and without any stress for us.
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