The client is an experienced property investor with a strong portfolio of mixed use properties in Kent.
He was looking to remortgage one of his properties to raise capital in order to expand his portfolio.
The property is a large multi-unit consisting of a convenience store on the ground floor and seven flats above.
The number of lenders we could approach were limited because:
- The property is of high value and unencumbered – lenders are often wary when it comes to clients owning properties outright at such a high value
- Although over £25k per annum the client’s employed annual income wasn’t sufficient to cover the monthly mortgage payments. We needed to find a lender who would be happy to take rental income into consideration
- The property is located in a busy commercial area – lenders worry about the ease of resale if a property is located near late closing establishments
Fortunately we have direct access to an intermediary only lender who deemed the property a good risk and offered the following terms:
Property value: £1.1m
Loan amount: £700,000
Rate: 5.1% term tracker
Term: 10 years interest only
Lender arrangement fee: 1.5% (£10,500)
Mortgage payment: £3,018 pcm
Rental income: £7,959 pcm
Gross yield: 7.6% pa
Consultant: Gary McKenna, 01732 471652