Limited Company Owner Requiring Large Interest-Only Mortgage

Our client was buying a new property for £5m and needed to borrow £3.75m. To complicate matters, he already owned another residential property so the lender would need convincing that he could afford to service both mortgages.

The client wanted to keep monthly payments down as much as possible so he required the maximum interest-only option available.

As he is a limited company owner, we needed a lender who would take the net profit from his business accounts in order to achieve the full amount of borrowing required. He is also in receipt of some trust income, so the lender would need to take this into consideration.

Numerous lenders were sourced but this was a complex case owing to the size of the mortgage, the residential property in the background, the interest-only requirement, and the limited company element and trust income. Not many lenders would be happy with all of these elements.

Key requirements: –

• A lender happy to lend to a limited company owner, taking the net profit from his business accounts when deciding how much to lend. • A lender prepared to lend a large proportion of the mortgage on an interest-only basis. • A lender happy to take trust income into account. • A lender who would add the arrangement fee to the mortgage.

After sourcing the mortgage market, we identified a lender who would agree to lend the required amount of £3.75m to a limited company owner, taking the net profit from his business accounts into consideration for affordability purposes.

The application process: To support the mortgage application, the client provided his business accounts, along with evidence of his identity. We were delighted to inform him that the lender had issued a formal mortgage offer for the full amount requested.

• Property value: £5m • Loan amount: £3.75m • LTV: 75% • Rate: 1.79% fixed for two years • Lender product fee: £1,999 added to the loan • Monthly payment: £8,908
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