At Enness, we have a wealth of experience working with clients who are asset rich, but don’t necessarily have a lot of income to show when it comes to affordability. For this reason, I was recently approached by a client who was self-employed and held most of their wealth in their property, and was looking for a bridge to consolidate debt and capital raise for refurbishment.
The bridge was also required to help service the original mortgage, and pay service charges and living expenses.
The client had hugely benefited from the uplift in property prices – especially as the encumbered property was located in Prime Central London and had seen capital growth of 305% since it was purchased two decades ago. The property was now worth £1.6million and the client needed to raise money in order to refurb it for sale, as well as consolidate unsecured debt.
My client needed a regulated second charge loan on her property, which some lenders shy away from if it’s for debt consolidation purposes. A further sticking point for lenders is when a borrower is borrowing to service an existing mortgage.
A further challenge arose as the client wanted the loan to have rolled up interest, meaning they wouldn’t have to pay this part of the loan until the term was complete. Furthermore, the client wanted all fees to be added to the loan.
Additionally, I was required to negotiate with the lender that the client would put the property on the market three months into the term once the refurb was complete.
I was able to secure a rate of 0.85% per month, over a 12-month term on a rolled up basis.
If you are experiencing complex circumstances, and have a high value asset which you wish to make the most of, our dedicated team of bridging experts would be more than happy to discuss how short-term finance could work for you.