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Trinity Financial recently helped a newly qualified professional and his partner to secure an income stretch mortgage.

The first applicant qualified as a lawyer two years ago and the second applicant was a teacher. 

They had found a house to buy and were keen to secure a mortgage at just over five-times their joint salaries. They had a 10% deposit.

After speaking to their bank, they were told they would need to have a 15% deposit.

Solution

Many of the lenders do not provide higher loan-to-value mortgages to borrowers if they have a 10% deposit.

Trinity’s broker approached a lender specifically offering high-income multiples to newly qualified professionals earning more than £40,000 each year.

The lender stated the mortgage would need to be taken on a five-year fixed rate basis enabling it to provide a more generous stress test and larger loans.

Case details

Property type: Three-bedroom house

Value: £755,000

Mortgage: £680,000

Rate: 2.79% until 31 July 2024

Reversion rate: The bank’s standard variable rate, currently 5.20%.

The overall cost for comparison is 4.50% APRC representative.

Lender’s arrangement fee: £0

Mortgage term: 35-years

Repayment type: Full capital repayment

Loan-to-value: 90%

Early repayment charge: Until 31 July 2024

Overpayments: 10% per annum allowed

Representative example: A mortgage of £680,000 payable over 35 years, initially on a 2.79% fixed rate until 31 July 2024 and then on a variable rate of 5.20% for the remaining 20 years, would require 24 monthly repayments of £2,537.01 followed by 420 monthly repayments of £3,387.61. The total amount repayable would be £1,370,286 made up of the loan amount plus £694,342 interest and £0 arrangement fee. The overall cost for comparison is 4.5% APRC representative.

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.

Call Trinity Financial on 020 7016 0790 to secure a generous income multiple mortgage

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