A mortgage broker approached Enterprise Finance with a client who wanted to raise £30,000.
The client’s main residence was valued at £480,000 with an oustanding mortgage of £280,000 on an interest only basis. The current monthly mortgage repayment was £758.
The client applied to his existing lender for a £30,000 further advance. The lender agreed but insisted on the entire balance being switched to repayment. The effect of this was a new potential monthly mortgage repayment of £1,511.
Our solution was to arrange a £30,000 second charge mortgage which cost £211 per month. Combining the existing mortgage repayment with the new amount meant that the client was repaying a total of £969 per month.
Our second charge mortgage option was £542 per month cheaper than a further advance with their existing lender would have been.
There were no upfront costs to set up a second charge mortgage and the money was with the client in just 3 weeks. The ERC was just one month’s interest after one month’s notice.