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Trading Ltd Co purchases 6-bed HMO

We were approached by the director of an engineering company looking to purchase his second rental property – a six bed HMO in East Anglia.

The client was planning to purchase the HMO via his trading limited company and let it to students. He had decided to borrow via his trading limited company as he had built up enough funds within it for a deposit. If the client was to set up an SPV he would need to transfer the deposit via an intercompany loan.

To protect against future rate hikes, the client had specifically requested a five year fixed rate.

We took the case to an intermediary only lender, which offers the same pricing for both individual applicants and those applying via a limited company.

The following terms were offered:

Property Details

Property value: £230,000

Loan amount: £172,500

LTV: 75%

Rate: 3.99% 5 year fixed

Term: 25 years interest only

Lender arrangement fee: 1.75% (£2,966)

RTI: 140% @ 5.5%

Borrower: Trading Ltd Co

Mortgage payment: £573 pcm

Rental income: £1,800 pcm

Gross yield: 9.4% pa

ConsultantChris Longhurst, 01732 471607

 

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NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Mortgages for Business Ltd is registered
in England and Wales No. 2502713.

Registered office:
17 Kings Hill Avenue,
Kings Hill, West Malling,
ME19 4UA.

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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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