Our client had recently moved from the US to the UK and purchased a property in cash for £5.6m. The client was a US citizen on a Tier II Visa. They had withdrawn cash from their business in the US to fund the purchase in the UK. They were looking for a remortgage where the capital raised would be used to repay the loan from their US company.
The client had been offered a competitive deal by his private bank fixed for 5 years with a 0.75% added fee. We secured a deal through the large loan division of a major UK bank. A £3.7m loan was secured on a significantly lower 5-year fixed rate with an added fee of just £999.
There were many factors that would rule this deal out for most high street banks.
The clients tax status and the purpose of the borrowing would be outside the appetite of the most mainstream lenders.
Typically, deals of these types are secured with private banks who charge higher interest rates and fees.
However, recently the market has seen the expansion of specialist large loans teams within mainstream banks. These teams can agree cases outside of standard criteria with loans from £1 to as high as £10m on lower rates than their private banking counterparts. Many of these large loan divisions are pilot schemes only available to a select panel of brokers.
In the case at hand, we were able to secure a mortgage for the client with his current bank who had previously declined his application when he applied directly.
Our contact at the large team was able to submit a business case where we demonstrated the mortgage should not be considered capital raising for business purposes.
The money was withdrawn from the cash reserves in the client’s wholly owned US company. We argued that if not for timings required the client would have simply withdrawn cash to cover the deposit and raised the balance via a mortgage. There is a distinction to a client wishing to raise a remortgage on a historically acquired property to invest in their business.
The client was absolutely delighted to secure the mortgage on such a low rate. Over the 5 years of the deal mortgage will save the client over £180,000. The client is now actively looking to purchase a 2nd holiday home in the UK.