True Self Cert Mortgages
Self employed with Equity in your home?
How about a chequebook facility granting you full access to it?
Andrew is a general builder and property developer and has been self-employed for 19 years since leaving school.
Andrews month-to-month income is mostly cash that he generates on smaller jobs such as extension work. The bulk of his income and profits is generated from the sale of larger property developments which he is involved in. Therefore his profits are derived from end of year dividend payments or once the property developments have been sold off to new investors - sometimes this process may take longer then an accounting year so you could imagine how his accounts would look - One year his profits would be extremely low and the next he could be showing bumper profits. Providing proof of income is easier said then done for Andrew and for many people in similar circumstances.
When we were first introduced to Andrew he would fund his property development by raising a loan at his local bank, then paying it off with the profit from the sale of the houses. Each time he took on a development his bank would do the following:
- Charge him a set up fee of at least 1%
- Set a high interest rate of at least 2% over the bank base rate
- Charge an initial high valuation fee per development, sometimes running into the thousands
- Take control over the build and request update and progress reports
- Take time in processing the application
The Solution:
We re-mortgaged him to another lender, kept his mortgage at an initial £50,000 level and provided him with a cheque book facility allowing him instant access, when he required, to another £250,000 of accessible credit.
The benefits to Andrew were the following:
- One off set up charge with the new lender, inclusive of valuation and legal fees
- No more ongoing fees to his bank as each project could be financed from his equity
- No ongoing set up fees
- A much more competitive interest rate
- Access, with no questions asked to a credit facility when he required
- Control over his own projects and own finances
- Instant access to his funds with no time delays
- You only pay interest on the funds drawn down and not the facility
Andrew has used this facility numerous times since it was set up saving him thousands of pounds in fees and charges and will no longer need to look to his bank for funding.
The mortgage that was provided to him was clean and simple. The cheque book facility was, and still is, used like any normal cheque account with large cheques being written for property purchases and other luxuries such as a new car. The funds pre approved within the mortgage facility can be used for any purpose with no questions asked - holidays, home improvements, school fees etc
Andrew was in a fortunate position that when he sold one of his developments he simply paid a cheque back to the mortgage company and reduced his mortgage and monthly payment accordingly.
