Bridging loan for house refurb then refinance onto buy to let mortgage

Our client is a teacher who also owns a handful of rental properties. He approached us for help in securing finance to buy a run-down 4-bed detached house in a popular university town. Because the house needed refurbishing before it could be let out, it was not suitable for a buy to let mortgage, so we arranged a bridging loan in order that the client could carry out the work.

He spent £20k of his own funds making the house habitable and then found a family who were prepared to rent it for £1,850 per month.

Six months down the line, with the tenants in situ, the client approached us again to help him refinance onto a more affordable, long-term buy to let mortgage. Even though the refurbishment had only taken three months, he waited longer in order to secure a better rate, as most lenders will not allow remortgages within six months of purchase.

We found a lender who was willing to help and their surveyor valued the property at £50k more than the purchase price.

Here are the details of the deal:

Purchase price: £450,000

Short-term loan amount: £315,000

LTV: 70%

Rate: 0.73% pcm bridging loan

Term: 8 months interest serviced

Lender arrangement fee: 1.95%

Property re-valued at: £500,000

Refinance amount: £360,000

LTV: 72%

Rate: 3.99% 2 year fixed buy to let mortgage

Term: 15 years interest only

Lender arrangement fee: £995

Completion date: August 2014

This is just one example of how I've helped a client secure a short term bridging loan. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.


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