The client is a full-time landlord with over 10 investment properties in his portfolio. He contacted us looking to remortgage a two-bed leasehold flat in a converted town house.
The client planned to use the capital raised from the remortgage to expand his portfolio. Aware of the sterner affordability tests being imposed, the client knew he needed to remortgage soon if he wanted to get the most capital out of his property.
The client originally purchased the town house six years ago and after obtaining planning permission had converted it into two self-contained flats. When the conversion took place a separate leasehold was created for one of the flats for refinance purposes. The other flat was left within the freehold title.
Now wanting to refinance the second flat, he had recently moved this onto a separate leasehold too.
This case was a challenge to place because lenders tend to steer clear of:
- Lending on a property where the lease is less than six months old
- Transactions where the freeholder and leaseholder are related
- Lending on properties within a close vicinity of each other
Fortunately, we have access to an intermediary only lender who was happy to accept the case and offered an extremely competitive five year fixed rate at 80% LTV.
Here are the details of the deal:
Property value: £215,000
Loan amount: £172,000
Rate: 3.25% 5 year fixed
Term: 25 years interest only
Borrower: Individual application
Lender arrangement fee: 1.5% (£2,580)
Mortgage payment: £473
Rental income: £850
Gross yield: 4.7%
Consultant: Chris Longhurst, 01732 471 607
16th August 2016