Mortgages for Business is committed to keeping both our staff and clients safe during the COVID-19 outbreak while maintaining the best service possible. Our teams are working from home, but don’t worry, you can still contact us in the usual ways.
To read our comprehensive FAQ guide on how the emergency interest rate reduction and Coronavirus outbreak could affect your mortgage, please click here.
If you want to request a payment holiday, please contact your lender directly. For lender contact details, click here.
£650k raised by 4 directors of newly set up SPV on  unencumbered property

£650k raised by 4 directors of newly set up SPV on unencumbered property

28.02.17 | Written by: Gavin Richardson

We were approached two married couples who are the directors of a newly established SPV limited company. Two of the directors are self-employed, and two are in full-time employment, one of whom earns a very high salary. They were looking to raise capital against a 4-bed house in Oxford which they own outright.

The property, which they acquired in early 2016 as their first rental property/development project, has been completely refurbished and is now worth 40% more than the purchase price. The funds raised would be used to replenish working capital and expand their portfolio.

The clients specifically requested a two year fixed rate on interest only terms. The large loan amount meant that we were somewhat restricted in the choice of lenders because many will not lend above £500k.

As with all applications by newly established SPV limited companies, the deal was underwritten based on the income and personal guarantees of the directors rather than on the record of the company.

The clients opted for a lender offering extremely favourable rates. A valuation of the property was instructed within 24 hours and the follow terms were offered.

 

 

 

Property value: £1,050,000 

Loan amount: £650,000 

LTV
: 62% 

Rate
: 3.40% 2 year fixed

Term
: 20 years interest only 

RTI
: 125% @ 5.5%

Borrower
: SPV Ltd Co

Lender arrangement fee
: 1.5% (£9,750)

Mortgage payment
: £1,869 pcm

Rental income
: £3,750 pcm

Gross yield
: 4.3% pa

Consultant: Gavin Richardson, 01732 471613

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

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

Get in contact with us: 0345 345 6788 or ...

Submit an enquiry
Arrange a call back