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Refinance of multi-unit with landlords living in one of the flats

Refinance of multi-unit with landlords living in one of the flats

A married couple, both full-time landlords, contacted us looking to refinance a recently refurbished multi-unit block of four flats.

They had purchased the block with a bridging loan in the summer of 2016, and now that the works were complete, the couple wanted to refinance the property onto a buy to let mortgage and repay the bridging loan.

There were a few complications with this deal which limited the number of lenders willing to accept the case.

  1. The couple live in one of the flats
  2. The couple are both full-time landlords with income solely from rent
  3. The property is a multi-unit block

We took the case to Keystone Property Finance, a lender which underwrites on a manual basis. We explained that the couple occupied less than 40% of the floor space, meaning the transaction would be unregulated.

Happy with this, Keystone used the rental income from the remaining three flats to support the loan and offered the following terms.

Property Details

Property value: £670,000

Loan amount: £393,750

LTV: 59%

Rate: 4.19% 5 year fixed

Term: 25 years interest only

RTI: 145% @ 4.19%

Lender arrangement fee: 2% (£7,875)

Mortgage payment: £1,375pcm

Borrower: Personal 

Rental income: £2,000pcm

Gross yield: 3.58% pa

Consultant: Gavin Elley, 01625 416398

 

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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