A pair of borrowers whose initial remortgage application was turned down have been able to save £3,000 a month and clear their debts thanks to a specialist lender.
Looking to raise £150,000 to repay their unsecured debt and to raise some additional funds for home improvements, the two joint applicants approached their broker Niche Financial Solutions hoping to remortgage their property.
But their application was turned down, as they were tied into their existing mortgage with expensive early repayment charges and were over-committed on their credit cards, paying in excess of £4,500 per month.
While they could afford the repayments, they were unable to reduce the overall balance and clear their commitments.
Niche approached Shawbrook Bank with the case, and the residential mortgages team was able to offer the full amount at a five-year fixed rate of 6.9 per cent on the Super Platinum product.
With monthly repayments at £1,283, the customers were able to save £3,200 per month and clear their credit card balances.
Shawbrook also provided advice on how the borrowers could best use their savings to overpay their second mortgage.
The broker, Sarah Clark from Niche Financial Solutions, said: “We approached Shawbrook Bank with this second charge mortgage because we knew, based on the customers’ circumstances, they would be able to offer a very good rate and a fantastic service.
“The case was worked efficiently and as usual we experienced a very smooth process, from submitting the case through to the binding offer being released.”
Melinda Bush, adviser at Dartford-based Quartz Financial Services, commented: “When a first charge has been considered, and isn’t possible, or isn’t best advice taking into account the early repayment charge, this does provide consumers with a solution, and the monthly saving in this case is staggering, which I’m sure will make the client’s lives easier, and possibly making their financial position more secure.
“Consumers should always seek advice when considering securing debts against the home, to ensure it isn’t entered into without considering all available options and so that the risks are understood.”
simon.allin@ft.com
