We were approached by a client who had inherited a property from his late grandmother, and as a first time buyer this was the ideal opportunity to step onto the property ladder. He and his friend decided to combine their incomes in order to take out a mortgage on the property, which would enable them to clear an existing equity release loan as well as raise funds to renovate the house. This also assisted in ensuring both clients owned the property, transferring ownership to them both.
The first complexity of the case was establishing whether lenders would consider this to be a purchase or a remortgage, given the property had been inherited however had not yet gone through probate so was not owned outright by the client upon application. A number of lenders were not able to accept this due to requirements on how long the property had to be owned before being able to raise a mortgage on it. However, we were able to put this through a high street bank with competitive rates who were happy to consider the case as a purchase from the grandmother’s estate.
Another obstacle we encountered was one of the applicants being a limited company director only for the last year, being self-employed as a sole trader prior to this. This would not have fit with every lender due to at least two years’ accounts often being required. Luckily, with this particular high street lender we were able to vet this with them, and they were happy to consider this scenario as there had been no extra directors or shareholders added to the limited company.
One final hurdle on this case arose after submission, at which point the lender declared that they would require a specialist roof report on the property. This naturally raised concerns with the clients, who were so looking forward to moving into their first home and wanted to avoid any delays in securing their mortgage, or at worst risk this being declined. We were able to offer guidance and support in assisting the clients to obtain this specialist report, as well as reviewing this once it had been conducted before sending to the lender. Upon prompt submission to the lender and liaising directly with them for updates, this was offered and the loan secured for the clients on their first property.
It goes without saying that the clients were delighted, and due to the vigilance and initiative of the team as well as offering advice and guidance every step of the way, they were on their way to purchasing their first home.
Published by Lucia Freeman, Mortgage Broker.