The Ask
Our broker approached us with an enquiry from their client, a married couple, looking to secure a mortgage on their unencumbered property. They needed to consolidate £20,000 of debt and raise an additional £10,000 for home improvements, including replacing their windows.
The Challenge
The clients wanted to settle several credit items, including loans and credit cards, while raising additional funds for home improvements. Their property was a right-to-buy home still within its pre-emption period, meaning the council could reclaim part of the discount if it were sold.
Additionally, the borrowers had taken out payday loans within the last six months and had missed some payments on their unsecured credit, owing to essential home improvements to the property. With existing arrears, recent payday borrowing, and limited equity due to the pre-emption period, this put the case outside the criteria of many lenders.
The Fix
Recognising that the LTV was comfortably low, at 20%, we determined that any potential clawback from the council (due to the property still being in its pre-emption period) would still leave sufficient equity. This allowed us to proceed with our standard product range.
Although the client had credit demerits, we provided a pragmatic approach and disbursed funds directly to the borrowers to repay their credit cards, avoiding unnecessary delays that would have been caused by waiting for creditor statements. The remaining loans, including recent payday borrowing, were repaid by us on completion.
We provided £30,000 on our Core 1 product at a rate of 11.40%, with the borrower receiving their funds 16 days after the initial application.
The Benefit
Our loan enabled the borrowers to consolidate the bulk of their debts, cutting their monthly outgoings by £673, while also raising capital for much-needed home improvements. This put them in a stronger financial position and allowed them to unlock funds against their residential property, even though it was still in its pre-emption period.
By coming to Masthaven Finance, they found a solution that not only improved their financial stability but also gave them the means to invest in upgrading their home.
If your client needs a mortgage solution that tackles debt consolidation, credit arrears and capital raising all in one, get in touch with the Masthaven Finance team today – we’re ready when you are.
