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Landlord with low income purchases 5-bed HMO via SPV Ltd Co

We were approached by an existing client - a professional landlord operating via a SPV limited company structure, seeking to raise finance for the purchase of a five-bedroom HMO in West Sussex.

Although operating several buy to lets already and able to provide a large deposit, the client had an income of just £10,000 outside of rental income - far below the £25,000 income that many lenders require.

The client’s options were further restricted by the use of a limited company structure. While there can be tax and affordability benefits to borrowing via a limited company, many mainstream lenders do not deal with limited company applicants as they do not have the underwriting processes in place to operate in this market.

We took the case to a specialist lender which only caters to experienced landlords. This particular lender does not impose any minimum income requirements and accepts SPV limited companies with up to four directors. Satisfied with the client’s experience and the rental valuation, the following terms were offered:

Property Details

Property value: £355,000

Loan amount: £227,760

LTV: 64%

Rate: 3.69% 2 year fixed

Term: 25 years interest only

Borrower: SPV Ltd Company

Rent to Interest Calculation: 125% @ 5.5%

Mortgage payment: £711 pcm

Lender arrangement fee: 1.5% (£3,416)

Rental income: £1,350 pcm

Gross yield: 4.5% pa

Consultant: Charlie London, 01732 471604

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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