Refinance of a Bridging loan on a Buy to Let property which was purchased in a Ltd Company via auction. Clients bridging rate was 8.4% per annum and they wanted to exit the bridge on to a Term Loan.
Original purchase price was £480,000 and after works it was valued at £750,000.
One of the two Directors has a CCJ. The clients were Non Owner Occupiers and have no other Buy to Let properties.
Property had not yet been rented as it had undergone extensive refurbishment work to add floor size and full modernisation.
The clients previous broker had made numerous mortgage exit applications on their behalf all of which were declined.
We used a lender (which had previously declined this case via the previous broker) to provide the re-finance (exit of bridging loan). The previous broker had failed to spot that the Bridging Loan was serviced and therefore classed as a mortgage.
We advised the clients to remove the Director with the CCJ to help obtain funding.
Initially, the Underwriter declined the Property at application stage due to its location and proximity to a nearby industrial unit. We appealed this decision and arranged a physical valuation to further assess the lenders location issue – which came back without any concern.
We helped the clients achieve 70% funding on the enhanced property value of £750,000. Total funds raised £525,000 – less the bridge loan of £340,000 – leaving the client with a lump sum of £185,000 to further expand their portfolio.
Published December 2019
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.