Interest Only Lending in Retirement

Posted by Marketing on May 1, 2017

The Situation

Mrs Smith is a 72 year old widow and lives alone in the family home in London worth £3,000,000. She requires a £1,400,000 mortgage over a 10 year term on an Interest Only basis. She has a pension income of £40,000 a year.

Her current interest only mortgage term is coming to an end and she urgently needed to re-mortgage as her existing lender would not extend the term. We asked the broker for a bit more information to see if there were any family members (son, daughter, etc) that could assist as a joint applicant or Guarantor.

He came back and confirmed her son is an owner occupier with a mortgage of £2,800,000 with a monthly mortgage payment £5,000, but he also has a large number of outgoings. He owns a number of businesses but takes his annual income of £700,000 as a directors loan, his business assets total in excess of £32,000,000. The case did not fit affordability due to nature of his income so we needed to discuss it further with our panel of lenders.

The Solution

To summarise, we needed to find a lender who would consider the whole scenario of a Large Loan, Lending in Retirement, Failed Affordability, Mother & Son / Guarantor and Directors Loan income. After some extensive research our experienced Mortgage Helpdesk were able to get the case agreed by two of our Panel Lenders.

Lender A agreed to proceed on a Joint mortgage basis and Lender B agreed to proceed on a Guarantor basis. It is this “outside the box” thinking by our Helpdesk and lenders that saved the family home and meant we could get back to the broker with Good News.

So, if you have a mortgage enquiry that you think is just too difficult or are struggling to place call us NOW on 0161 694 7800.