The Client:
The clients are UK portfolio Landlords who already own multiple investment properties in Northeast England, as well as their own residential property and were in the process of purchasing a leasehold block of 8 flats on one title for £215,000 via their SPV Ltd Company. They are both self-employed, with the main applicant being a builder.
The Scenario:
The clients had sufficient funds from a recent buy, refurbish, refinance property, and planned to carry out minor works to the block to increase the value and rental yield. They had an existing mortgage application underway via another broker until the chosen lender decided to pull the application because of the level of personal borrowing the clients accrued whilst carrying out ongoing refurbishment projects after 6 months. Therefore, we knew they needed to act fast in order to avoid losing the property.
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The Solution:
Due to our experience with specialist property types such as multi-unit blocks of flats as well as being a whole-of-market Broker, we knew that there were lenders available that would be able to lend on the property with a satisfactory explanation as to why there is such high personal credit.
As the clients advised they were looking to carry out some works and required as high of a loan to value as possible, I recommended an 85% LTV bridging loan which would allow them to: purchase the property, carry out the works and have the security of knowing they could refinance onto a long term mortgage with the same lender once the works were complete.
As an existing borrower of this lender, they were able to obtain a 0.25% discount on the arrangement fee. After carrying out a 2 month refurbishment project on the property, at a cost of £22,000, are now in the final stages of securing their long term buy let mortgage with the same lender at 75% of the new £320,000 value
Summary:
When trying to purchase buy to let / investment properties via a Ltd Company, lenders will look at your personal borrowing, therefore you must be mindful that your broker has checked to see whether lenders have a background debt to income ratio for the Directors.
Bridging products are available up to 85% LTV to give you the flexibility to carry out refurbishment projects without having to put down as large of a deposit as well as completing with speed.
If you have any questions about Bridging Loans &/or want to receive a free quotation, please call 03303 112 646 today. You can also fill in this short online form to get started. Our team of Bridging Loan Experts will get back to you straight away.