Objective
The clients were referred to us by one of our introducing brokers. Their broker contacted us to discuss suitable capital-raising options that would streamline their finances and put them in a stronger position to weather the potential economic storms that may be ahead.
The clients’ property was worth an estimated £525k and their outstanding mortgage £338k, totalling a current LTV of just under 65%.
Obstacle
The clients had acquired several unsecured loans and a number of credit cards that were maxed out. They were in the middle of a five-year fixed rate mortgage with Halifax that was subject to ERCs. Their broker had looked at other options, including a further advance, with no luck. That’s when they contacted us.
Outcome
The clients were paying over £600 a month just to service their credit cards, and an additional £650 in loan repayments. We were able to secure the £52k required by way of a second charge mortgage so that they could settle the loans and credit cards in their entirety. This took their new LTV to just under 75% and the monthly repayment for the second charge was less than a third of the £1,250 the clients had been paying, at £363 per month. This left them with more disposable income and the ability to absorb at least some of the potential increases in costs such as fuel, energy and general inflation.
The client intends to clear the second charge via a remortgage when their fixed rate ends.
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