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Purchase and Refurbishment of Three Properties with One Bridging Loan

Purchase and Refurbishment of Three Properties with One Bridging Loan

The Client: An experienced portfolio landlord with seven buy to let properties, looking to make further investments.

The Properties: Our client was looking to purchase three mid-terrace properties on the same road. Already converted into multi-units consisting of three, one or two-bedroom flats, our client was looking to make further changes and add an additional flat to each. Located in the centre of a North West city, they benefitted from excellent local amenities and transport links.

The Finance: Using readily available savings as a deposit, our client needed a 76% LTV (Gross) loan to purchase the properties. With lots of interest in the multi-units, our client was keen to secure the purchase as quickly as possible. 

The Challenge: As the properties were all on the same road, we knew trying to secure the purchases through buy to let mortgages wouldn’t be as fast as we needed. We decided with the client that we could use a single bridging loan to secure the purchase of all three properties. In order to transition smoothly to a buy to let exit, our client was keen to secure the bridging finance from a lender that could also offer competitive buy to let mortgage rates to exit onto. Although the properties being on the same road was not an issue for the bridging finance, we knew it could complicate the future buy to let mortgage applications. Some lenders would consider this too much exposure and, therefore, a high-risk application. 

The Solution: Drawing on our extensive bridge to let experience, we were able to identify a few lenders that would likely consider the case. After approaching a couple to talk through the details and impress the short time frame we were working with, we submitted the application with a well-known lender. Crucially, they would also be able to facilitate the buy to let mortgages when the refurbishments works were complete, and it was time to refinance. Here are the bridging finance details:

Property Details

Combined property values: £645,000

Loan amount: £491,973

LTV: 76% (Gross)

Rate: 0.80% per month

Term: 12 months

Lender arrangement fee: 1.70% (£7,361)

Application: SPV Limited Company

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

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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.

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