Short term refinance with no exit fees for 5-bed HMO
Our clients are business partners with whom we have worked for three years. About a year ago we helped them secure a short term loan to repay a mortgage secured against a 5-bed HMO in a popular university town, which was generating £2,350 per month in rent.
The partners had intended to sell the property, but wished to first obtain planning permission on an adjacent property so that the planning process would not impact the sale.
All had gone according to plan and the partners had found a buyer, but then the results of the EU Referendum were announced and the buyer pulled out of the sale. This left our clients with just a few months to find a new buyer before their loan facility expired.
A buyer was found but our clients realised that the sale would not complete within their required timescale. As we had an existing relationship with the clients, they returned to us to seek an extension to their loan facility. Under the circumstances, it was cheaper for the clients to get a new deal, so we suggested that they refinance onto another short term loan but one without exit fees.
The clients agreed and we submitted an application to a suitable lender which offered a competitive two-year facility. This new term has given our clients a bit of wriggle-room should the sale fall through again.