"Many let-to-buy lenders restrict capital raising to being only used for the deposit on the ongoing residential purchase, so she needed a lender that would allow capital raising for other purposes"
Specialist lenders don’t just consider criteria in isolation, but instead look at the entirety of the client’s circumstances. We recently had an excellent example of such a case at Pepper Money.
The client – let’s call her Carol – wanted to remortgage her ex-marital home, with the intention of buying out her ex-husband’s share of the house and then letting the property out to tenants. She also wanted to buy a new home to move into and she was keen on completing both the let-to-buy remortgage and the ongoing residential purchase with the same lender.
There were several details that made this an interesting case. Carol had already failed a credit score with two high street lenders, even though there was no easily identifiable reason why on her credit report.
On the let-to-buy mortgage, she needed to borrow up to 80% LTV to raise a deposit on the new residential purchase and additional funds to buy out her ex-husband. Many let-to-buy lenders restrict capital raising to being only used for the deposit on the ongoing residential purchase, so she needed a lender that would allow capital raising for other purposes and would lend to a first-time landlord up to 80% LTV.
Carol also worked as a day rate contractor and, as she was 61, she wanted a mortgage for her residential purchase that would be able to consider her employment income beyond her state retirement age as well as her pension income.
Our underwriters were able to offer Carol the let-to-buy remortgage she needed to raise a deposit to buy a new home and pay her ex-husband, and a mortgage on her new home.
The let-to-buy mortgage was a five-year fixed rate up to 80% LTV, with a 140% rental calculation based on the pay rate.
For the onward residential purchase, our underwriters considered Carol’s occupation and were happy that this would be sustainable beyond her state retirement age. In addition, as Carol was already drawing a public sector pension, they were able to use 100% of this income for the affordability calculation. This enabled her to demonstrate the affordability she needed to buy the home she wanted and retain ownership of her ex-marital property as an investment.
Despite the multiple layers of complexity involved in the case, Pepper Money was able to help Carol secure both of the mortgages she needed at the rates that were advertised.
