SPV with elderly shareholder raises capital on high rise flat

SPV with elderly shareholder raises capital on high rise flat

04.07.17 | Written by: Gary McKenna

A mother and son approached us looking to release equity from one of their buy to let properties – a two-bed flat within an 18-storey block. They planned to use the capital raised to purchase their third buy to let property.

The mother and son’s properties are held within an SPV Ltd Co. The son is the sole director and 80% shareholder, the mother owns the remaining 20% shareholding. 

As the mother is elderly with no income, we needed to source finance from a lender which would underwrite the case based solely on the director’s income. (Some lenders will ask to look at the income of all shareholders).

We took the case to an intermediary only lender which will underwrite on this basis and, happy with the son’s income and experience, the following terms were offered:

Property value: £210,000

Loan amount: £145,000

LTV: 75%

Rate: 3.54% 2 year discounted

Term: 22 years interest only

Borrower: SPV Ltd Co

Lender arrangement fee: £2,175

Mortgage payment: £430 pcm

Rental income: £875 pcm

Gross yield: 5% pa

Consultant: Gary McKenna, 01732 471652         

 

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.