The Scenario
A single applicant sought to purchase a new home in Farnborough following a separation from their ex-partner. The client’s previous property was sold to the ex-partner, who also took over the mortgage. This provided the client with a deposit of £150,000, enabling them to purchase a property valued at £290,000.
The client required a mortgage of £140,000 and prioritised securing a loan with the longest possible term to ensure affordable monthly payments. Planning to work until the age of 80, the client needed a lender that could accommodate this extended retirement age based on earned income. Additionally, the client expressed a preference for a five-year fixed rate to avoid frequent remortgaging fees and ensure financial stability.
The Challenge
This case presented several challenges:
- Extended Loan Term: The client’s request for the longest term available required a lender with flexible policies allowing mortgages up to age 80.
- Affordability: Balancing the client’s income and desired loan term to meet affordability criteria was critical.
- Adverse Credit Considerations: The lender needed to offer products accommodating the client’s circumstances while ensuring competitive rates.
- Fee Preferences: The client preferred products with no fees unless a fee-based option offered significant monthly savings.
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The Process
A comprehensive consultation revealed the client’s priorities and financial situation, guiding the development of a tailored solution:
- Selecting the Right Lender: Accord was identified as the ideal lender due to their ability to accommodate mortgages extending to age 80 and their competitive fixed-rate products.
- Recommending a Fixed-Rate Product: A five-year fixed rate was chosen to provide stability, predictable monthly payments, and protection against potential rate increases. This also aligned with the client’s preference to avoid frequent remortgaging fees.
- Balancing Fees and Savings: Fee-free product options were prioritised unless a fee-based product offered substantial monthly savings.
- Discussing Protection Needs: Protection needs were reviewed with the client, who opted to revisit these options closer to completion to focus on the immediate mortgage process.
The Solution
The recommended solution was a capital repayment mortgage with Accord, featuring:
- Loan Amount: £140,000, allowing the client to secure the desired property.
- Interest Rate: A five-year fixed rate, ensuring financial stability and predictable payments.
- Term Length: Extended to align with the client’s retirement plans, providing long-term affordability.
- Fee-Free Product: Selected to minimise upfront costs while meeting the client’s preferences.
Outcome
The mortgage application was successfully completed, enabling the client to purchase their new home and start afresh. The five-year fixed rate provided peace of mind and stability during a transitional period, while the extended term ensured affordable monthly payments aligned with their financial goals. The client’s deposit, derived from the buyout of their previous property, was efficiently leveraged to secure their future home.
Key Takeaways
This case demonstrates the importance of tailoring mortgage solutions to unique life circumstances, such as separation and adverse credit considerations. By selecting a lender with the right flexibility and competitive products, we achieved a solution that met the client’s needs.
If you’re navigating a significant life transition and need expert guidance to secure a mortgage, contact us today to explore tailored solutions designed for your future.
