50 shades of mortgages – Part 1

For the vast majority of customers considering a first charge mortgage or remortgage, one of the common difficulties they face is lenders’ increasingly stringent criteria requirements and how challenging it is becoming for certain types of customers to borrow.

This is particularly true for those with more complex requirements or difficult circumstances such as those who are self employed, have a chequered credit history, are approaching / past retirement or have a complex income scenario.

However, by also considering second charges, bridging and commercial mortgages together often a solution can be found – something we like to call a “blended solution”.

In this series of blogs – we will be sharing different blended solutions we have found for our customers.

The Problem

In this case, we had two applicants looking to buy a buy to let property together. The first was aged 79 and was an experienced investor. He owned three commercial shops, five buy to let properties, one sports club and 20 acres of land. The second applicant was far younger and had never had a mortgage or any previous experience in property.

The BTL they wanted to purchase cost £250,000 and they had a 40% deposit.

The are plenty of standard buy to let mortgage lenders on the market but the application was being declined due to applicant 1’s age and applicant’s 2 inexperience of mortgages and the property sector.

The Solution

Take off your Buy to Let head and put on your Commercial Mortgage head (does anyone remember Worzel Gummage? – one for the older readers).

By presenting the application differently – to a different set of lenders, we were able to find a commercial lender that would do the deal without the need to set up a limited company, using a combination of the first applicant’s experience and the second applicant’s age. We were able to secure a 60% LTV investment mortgage with the lender which would be reviewed every five years over 20 years to ensure affordability could be maintained.

The truth is that the high street doesn’t have all the answers and lenders or brokers who focus on one area of the market don’t have all the experience. Experts in specialist lending across multiple sectors can help you find different solutions through lateral thinking and detailed knowledge of different lending solutions. Check out our earlier blog post Super Fast Bridging in action for another case study showing how a bridging loan helped an ex pat who’s BTL mortgage was delayed and risked him paying a huge increase in stamp duty.

We will be continuing this series of blogs showing examples of even more blended solutions coming soon.