Case Study: £3.3M Facility Secured with a UK Private Bank

GSB Private Finance was recently approached by a London-based couple to finance their regulated let-to-buy transaction with a simultaneous completion.

Key Details:

  • UK Residents / UK Passport holders
  • Refinance of a principal residence at 75% LTV to allow the acquisition of a new primary residence in North London for ~£3,000,000 at 80% LTV.
  • Both borrowers were earning incomes from the medical fields. Mr is a self-employed Director of two biotech start-ups.
  • Refinance was fixed at 6.3% for 2 years, and purchase was fixed for 5 years at 5.15%. No requirement for Assets Under Management (AUM). Part interest only – part repayment.

The Request

Rather than selling the property, GSB Private Finance were approached by clients seeking to release equity against their previous main residence (now a consumer BTL) to provide the deposit for the onward purchase. Our clients also wanted GSB to arrange a separate mortgage against the new property being purchased.

Challenges

  • Personal income had to be used in addition to the old property’s expected rental income to account for the required loan size.
  • The bank needed to use a combination of salaries and net profits in the business to justify an 80% LTV mortgage against the onward purchase.
  • While both clients had strong track records of employment within the medical field, one borrower was self-employed and ran a private practice with only 2 years’ worth of financial accounts.
  • High LTV mortgage
  • Outside of the business, the client’s wealth was mainly in illiquid assets, which in the absence of high levels of income, many lenders were concerned about.

Solution

After negotiating the most desired terms and structure with credit teams of a select few lenders, GSB Private Finance arranged an interest-only BTL remortgage against our client’s old home to allow them to release enough liquidity to put a 20% deposit on their onward purchase. We then arranged an 80% LTV mortgage against the new property so that our clients did not need to put any cash down.

The agreed structure was as follows:

BTL Refinance: ~£900,000 interest-only mortgage over 20 years fixed at 6.3% for 2 years.

Residential Purchase: ~£2,400,000 mortgage over 20 years fixed at 5.15% for 5 years. Part interest-only, part Capital Repayment. No requirement for Assets Under Management (AUM).

While the lender was concerned with overall affordability through a lack of personal income and liquidity, GSB evidenced strong income within the self-employed borrower’s limited company that could be utilised to service the mortgage if required. Understanding our client’s historical employment in the medical field, GSB were also able to get the lender comfortable from an affordability perspective using the borrower’s limited trading history, in combination with their consultancy income and projections of two early-stage med-tech companies.

Get in touch

Contact GSB today if you would like to discuss any of these matters with our in-house team.

 

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Disclaimer

This content is provided solely for educational and informational purposes. It should not be considered as financial advice, an offer, or solicitation for any product or service, nor does it constitute a recommendation. Any details or descriptions are intended to illustrate hypothetical transaction structures and do not reflect specific client advice or outcomes. This material is not intended for marketing purposes. Please consult a qualified financial adviser to assess your individual financial situation and goals. GSB assumes no responsibility or liability for any errors, omissions, or reliance on the information presented here.

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