Loan type: Bridging Loan | Loan value: £1,181,158 | LTV: 55% | Term: 12 Months
In this case study, we explore a challenging situation faced by a retired couple residing in a £2.15 million leasehold penthouse flat, who were confronted with escalating mortgage payments due to rising interest rates. The couple urgently needed a financial solution to avoid losing their home. This case demonstrates how our expertise in securing a bridging loan provided the necessary breathing space, allowing the couple to resolve their arrears and sell their property under less stressful conditions.
The Client:
A retired couple residing in a £2.15m leasehold penthouse flat found themselves in financial difficulty. They had an interest only mortgage which had come to an end several years ago, and although their lender had been patient, allowing them to continue payments at the Standard Variable Rate (SVR), rising interest rates doubled their payments, causing significant strain and leading them into arrears.
The Situation:
As a result of the arrears the mortgage lender gave notice that they would need to repay the mortgage in full or possession proceedings would be initiated. The couple promptly placed their property on the market, but the lender was unwilling to wait for the inevitable selling period. A swift and effective solution was needed to provide the couple with breathing space to sell their property without facing repossession.
Our Solution:
We proposed a bridging loan to offer the necessary respite for the couple. Our team quickly identified a lender capable of overlooking the clients' adverse credit profile and expediting the process for swift completion.
Although the property, initially listed at £2.6 million, was down valued to £2.15 million, the lender agreed to proceed without altering the original terms due to the low LTV.
A hurdle emerged when the lender required a fire risk assessment for the block of flats. The individual responsible at the management company was on annual leave, threatening a two-week delay the clients could ill afford. We intervened, negotiating with the lender to allow the assessment to be conducted post-completion, thus avoiding any delays.
Recognising the couple's struggle to maintain monthly payments on their existing mortgage, we opted for a bridging loan with rolled up interest. This meant no monthly payments for the clients; interest on the bridge would be paid off upon the property's sale.
Benefits & Results:
By maintaining close collaboration with lender, their solicitors, and the clients' legal team, we ensured a swift and seamless handling of all legal aspects. Our proactive approach in managing potential delays enabled us to complete the case within 15 days of receiving the application.
Our strategic intervention and expert handling of the case not only averted a potential financial crisis for the clients but also demonstrated our commitment to providing tailored solutions under pressing circumstances.
