Remortgage at open market value within six months of purchase

A full-time landlord with a portfolio of 10 + rental properties contacted his broker looking to raise capital. 

The client wished to refinance a three-bed, semi-detached house via his SPV Ltd Co. He would then use the capital raised to put down as a deposit on a further buy to let property.

The client’s broker had been left with two main challenges:

  1. The client had purchased the property under six months ago – many lenders will not accept property which has not been in the ownership of the client for at least six months.

  2. The client wanted to refinance at open market value to obtain a higher loan amount. Out of the lenders which will accept refinances within six months, there are very few which will lend at open market value.

Working on similar cases in the past, the client’s broker knew Keystone would be able to assist.

Keystone accepted the case and offered a loan amount against the open market value of the property - this enabled the client to recoup 95% of his initial investment. 

Here are the details of the deal.

Original purchase price: £195,000

Property value
: £230,000

Loan amount: £180,320

LTV: 78%

Rate: 4.19% 5 year fixed

Term: 25 years interest only

RTI: 125% @ 4.19% 

Lender arrangement fee: 2% (£3,680)

Mortgage payment: £642 pcm

Rental income: £1,200 pcm

Gross yield: 5% pa

Consultant: Moises Cruickshank, 07971 822371

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