Our clients had an existing residential mortgage for £400k, structured on an interest-only basis. Their property was valued at £1.5m. They planned to repay the mortgage by downsizing in future years, but they wanted to stay in their existing property for a little while longer. Both clients were aged 68 and their existing mortgage term had only 6 months remaining.
If we could get the clients another residential mortgage for a minimum of 5-10 years, this would enable them to stay in their current property for the foreseeable future.
There were several factors working against us. The clients wanted to secure an interest-only mortgage using the sale of the property as the repayment vehicle, but many lenders do not lend on this basis. Their ages represented a further problem, due to lenders’ maximum ages at the beginning and end of the mortgage term.
“This new deal will clear their existing mortgage, enabling our clients to stay in their family home for the next 10 years”
We approached one of the most progressive lenders in the UK with regards to older borrowers. However, a crucial part of their lending criteria stated that borrowers needed to be in receipt of pension income to qualify for their older borrower products. Our clients were still working and earned a comfortable income from their business.
We compiled a solid business case and put this in front of one of the Senior underwriters, who eventually offered the clients a £400k interest only mortgage over 10 years.
This new deal will clear their existing mortgage and, rather than having to sell the property and move out of their longstanding family home, they can now live there for the next 10 years.
