Client Background
Our existing clients—a self-employed couple—approached us with a clear goal: to secure a £2.3 million loan to release equity from their residential mortgage and purchase a holiday property in the Italian Alps. Their property, which included over 30 acres of land, was a key asset they hoped to leverage for financing. The holiday home would serve two important purposes: providing a cherished retreat for their family and generating additional rental income.
Challenges
Initially, we explored the option of securing a further advance from the clients’ existing lender, a well-known high street bank. However, the lender’s valuation came back significantly lower than expected, largely due to the surveyor’s limited experience in assessing properties with substantial land. This undervaluation created a significant obstacle to obtaining the necessary funds.
Additionally, as self-employed individuals, the couple faced challenges in proving their income. They were required to wait for the completion of their latest year’s accounts, introducing delays and complexity into the mortgage process. These factors made it clear that a conventional high street lender might not be the best solution for their unique situation.
Exploring Alternative Financing Solutions
Recognising the urgency of the purchase, we explored alternative options, including a bridging loan and remortgaging with another lender. However, given the time-sensitive nature of their plans, we needed a solution that would allow the clients to release funds quickly while ensuring a fair and accurate property valuation.
Exploring Alternative Financing Solutions
After carefully evaluating all options, we determined that the best course of action was to approach a private bank with whom we have an established relationship. Private banks offer greater flexibility in selecting surveyors with expertise in valuing properties with substantial land, ensuring a more accurate assessment.
The clients were happy to pay a fee for a new valuation, and this time, the results confirmed the property’s expected market value. The valuation was returned £700,000 higher than the high-street valuer. With this revised valuation in place, we successfully secured a mortgage offer tailored to their financial needs and timeline.
While working with a private bank required consideration of application fees and potential lender changes, it provided a solution that traditional lenders could not—ensuring the property’s true worth was recognized and allowing the clients to proceed with confidence.
Outcome
With the financing solution in place, the clients were able to proceed with their scheduled trip to Italy, knowing their mortgage offer had been successfully secured. By leveraging our expertise and industry connections, we helped them overcome the obstacles posed by high street lenders and navigate the complexities of their unique financial situation.
By securing a £2.3 million loan through a private bank, they unlocked the equity needed to purchase their dream holiday home—an achievement that provided their family with a beautiful retreat while also opening new opportunities for rental income.
Orton Financial are also able to assist with the exchange of foreign currency, typically providing a service more competitive than rates offered through traditional banks.
Through proactive financial planning and strategic lender selection, they transformed potential setbacks into valuable opportunities, ensuring their vision for the future was realized while maximizing the potential of their property..