Buy to Let Purchase Using Bridging Finance for Portfolio Landlord
The Client: An experienced portfolio landlord looking to purchase his sixth buy to let property.
The Property: A two-bedroom flat in a converted semi-detached townhouse. Recently refurbished to a high specification, the property required no additional works. It was situated in a popular area of South London with access to excellent transport links and local amenities.
The Finance: As a desirable property, our client needed to source his finance as quickly as possible to complete the purchase. As buy to let mortgages usually take at least a couple of weeks to get to offer, we decided a 75% bridging loan would be the quickest way to secure the purchase.
The Challenge: Fortunately, as our client knew this would be a buy to let property, we had a clear exit for the bridging finance to work with. The main challenges would be sourcing a competitively priced loan with a time-efficient lender in order to keep our client’s costs down and secure the purchase. Furthermore, as our client wouldn’t be able to let the property until we refinanced it onto a buy to let mortgage, he wanted the loan’s interest to be rolled up, so there were no monthly payments while the property was not generating an income.
The Solution: Using our extensive knowledge of the bridging finance market, we were able to identify a selection of bridging lenders we knew could produce a finance offer in just a matter of days. From this list, we identified a competitive rate that would not add too much additional cost to our client’s purchase. With all the necessary paperwork already collected, we were able to submit the application for our client and secure the purchase with an offer in just a week. We are now working to secure our client’s buy to let mortgage for the exit. Here are the details of the bridging finance:
Property Details
Property value: £375,000
Loan amount: £270,570 (£281,250 including interest)
LTV: 75%
Rate: 0.80% per month
Term: 12 months
Lender arrangement fee: 2% (£5,625)
Application: SPV Limited Company
24th March 2021
