Net profit rather than salary and dividends used to secure £800,000 mortgage
Our client asked for help to secure a fast mortgage offer to purchase a property in London.
As a limited company director running a business, he chose to take a smaller salary and dividends to be more tax efficient.
After approaching a selection of banks and building societies, he struggled to secure a large enough mortgage.
Solution
Trinity Financial’s broker approached a mortgage lender happy to use the company’s net profits, rather than the average of two year’s salary and dividends.
The bank provided competitively priced rates for clients with a 20% deposit and produced mortgage offers within two weeks.
Case details
Property: House in London
Value: £1,000,000
Mortgage: £800,000
Rate: 1.89% fixed until 30 June 2019
Reversion rate: 4.70% - The lender’s current standard variable rate.
The overall cost for comparison is 4.27% APRC representative.
Lender’s arrangement fee: £0
Mortgage term: 25-years
Repayment type: Full capital repayment
Loan-to-value: 80%
Early repayment charge: 3% until 30 June 2018, then 2% until 30 June 2019
Overpayments: Up to 10% per annum without charge.
Representative example: A mortgage of £800,000 payable over 25 years, initially on a fixed rate for 24 months at 1.89% and then on a variable rate of 4.70% for the remaining 23 years, would require 25 monthly repayments of £3,348.16 followed by 275 monthly repayments of £4,440.53. The total amount repayable would be £1,306,234.75 made up of the loan amount, plus interest (£504,849.75) and fees of £0. The overall cost for comparison is 4.27% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
To secure a limited company mortgage using your net profit call Trinity Financial on 020 7016 0790.
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