Part-time landlords remortgage low-value multi-unit to raise capital

We were approached by a married couple – both experienced landlords in full-time employment. The couple have a joint portfolio of seven rental properties all located in North East England.

The clients were looking to expand their portfolio, but needed to raise capital on one of their existing properties to fund a deposit.

The property they were looking to remortgage is an unencumbered multi-unit with two self-contained flats valued at £90,000.

The clients had tried approaching a lender directly, but had been turned down due to the low value of the property. Only a very select few lenders are willing to advance funds for multi-unit properties where the value is below £100k.

Fortunately we have exclusive access to an intermediary only lender that imposes a minimum loan amount of £50,000. The clients met the lenders criteria and the following terms were accepted:

Property value: £90,000

Loan amount: £67,500

LTV: 75%

Rate: 4.61% term tracker

Term: 25 years interest only

Lender arrangement fee: 2% (£1,350)

Mortgage payment: £230 pcm

Rental income: £770 pcm

Gross yield: 10.3% pa

Consultant: Gavin Elley, 01625 416 398

Consultant