A broker who was arranging a BTL mortgage recently needed a faster solution but also wanted the best bridging loan rates for his customer. However, fastest and cheapest don’t always come from the same lender so getting the priorities right is paramount. His client wanted to complete a purchase before the new Stamp Duty deadline kicked in on the first of April. We picked the case up on Tuesday 29th March, just after the Easter bank holiday and it needed to fund by close of business on Thursday 31st allowing three working days. Having established there was sufficient equity in the portfolio to allow a cross charge the broker threw in to the mix the fact that the client resides in Cyprus. Interest rates were the least of the problem.
After in-depth conversations we identified the lender which would be able to work on its own assessment of valuation and have the resource of in-house legal’s which would rapidly increase the speed of these important stages. When speed is the main driver every party involved must be on the same page, including the client who arranged to fly into Manchester, meet with the lender and provide the necessary signatures allowing the lenders in house legal’s time to get the charge registered. This case was funded at 10am on Thursday 31st with the exit being the original buy-to-let mortgage but saving the client a significant increase in Stamp Duty liability and the interest rate was only a little higher than the mainstream lenders. Sometimes price is very much the secondary consideration.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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