The customers were looking to buy a second property to boost their pension pot. See how we could help.
Situation: The customers were looking to raise against their current property to purchase another house, for rental purposes. Ideally, the customers were looking for an interest only product, as they wished to use their lump sum from their pension to pay the mortgage off.
Problem: As the customers were reaching retirement age, many lenders on our panel would require pension and income proof. Due to the customer requesting interest only, it restricted the lenders that we could look at for them. The Customer Relations Manager (CRM) sourced a lender that would take the case. The lender raised concerns about the customers using their pension lump sums and if they would have sufficient income as they moved into retirement. The customer had a maximum budget of £1,000 per month, so the lender could only offer a maximum amount to the customer.
Solution: Upon receiving pension proof, the lender was happy that the customer would not be financially in a worse position in the future and was happy to proceed with the loan. However, the lender did stipulate that the loan term would have to be reduced so loan was repaid before the customers reached the lender’s maximum age limit. The customers were happy with this situation and the loan was able to complete. This meant that the customers could buy the second home. The customer could then rent the house for an increased income whilst working and look to sell the property later for a boost to their pension pot.