Property development project funded by second charge mortgage

We were contacted by a broker, whose client was looking to raise a second mortgage on a buy to let property he owned.

The funds the client requested were to facilitate finishing a development project he had undertaken with a block of flats. The client, having a lot of experience in property development, already had finance arranged through a lender to develop the block of flats, but was in need of extra funds to complete the project. Having experience in the field the client had lined up a mezzanine funder to step in, however if he had gone ahead with this option his profit margins would have been dramatically reduced.

There was already a modest buy to let mortgage, with an impressively low historic Standard Variable Rate, on the property and the client was not keen to remortgage it. We reached a solution by organising, at a considerably lower cost, a second charge mortgage on the property.

Combined property value: £1,400,000

Loan amount and terms: £538,000

LTV: 38%

Rate: 1.25% pcm

Term: 18 months

Lender arrangement fee: 3%

Completion date: July 2014

This is just one example of how we've helped a client secure finance to develop a property. To see more of my case studies please visit either Gareth's or Popy's profile. And if you have any funding requirements, please do not hesitate to contact us. Our direct lines and email addresses can be found below.