A broker approached us for help in sourcing finance for his clients – a married couple from Hampshire – who were looking to raise capital to expand their property portfolio.
High net worth individuals, the husband derives a healthy income from a variety of businesses he owns, all connected with property and construction.
The wife is in full time employment.
In 2013 the couple set up an SPV limited company and purchased a run-down block of six flats owned on a single freehold title.
They then spent more than six months refurbishing the property to a very high standard before letting it out to tenants.
The block now generates a substantial rental income in excess of £3,500 per month.
Now that the property is operating successfully and profitably, the couple approached their broker for a remortgage in order to raise capital to fund another residential investment property.
The broker identified Keystone as a possible solution even though its lending criteria usually limit multi-unit properties to a maximum of four units.
Because of the client’s experience and strong financial status, the credit committee at Keystone was happy to make an exception and agreed the following rate:
Property value: £700,000
Loan amount: £500,000
Rate: 5.19% 3 year fixed
Term: 20 years interest only
Mortgage payment: £2,163 pcm
Lender arrangement fee: 2.25% (£11,250) added to the loan
Rental income: £3,529 pcm
Gross yield: 6.0% pa
Consultant: Gareth Richards