We were approached by a broker whose clients, the directors of an SPV limited company, were looking for a buy to let mortgage to purchase a 3-bed Edwardian terrace located in a busy Nottinghamshire town. They planned to rent out the property on a multi-let basis.
The SPV, which was set up in March 2016, already holds two other rental properties but as yet, has no accounts.
One of the directors works full time for a large construction company, earning a salary of c.£35,000 per year plus rental income which is generated by his personally-owned portfolio of 12 buy to lets. Two of these properties are located in the same road as the terraced house the directors were hoping to buy.
The other director, also works full-time earning a salary of c.£60,000. Both directors have a 50% shareholding in the SPV and both own their own homes.
We took the case to intermediary only lender Keystone Property Finance.
The case was opened towards the end of November 2016 and a valuation was instructed with a request to provide rental figures on both a family and multi-let basis. Both figures (family £500 pcm / multi-let £950 pcm) met the rent to interest calculation. A loan formal offer was issued in the week leading up to Christmas and the case completed without a hitch at the beginning of February 2017. Here are the details:
Property value: £85,000
Rate: 4.19% (5.3% APR) fixed for 5 years
Term: 25 years interest only
Borrower: SPV Ltd Co
Mortgage payment: £237 pcm
Rent: £500 pcm
Gross yield: 7.1% (annual rental income/property value)
Consultant: Julie Priest, 07734 137877
This is just one example of how we have helped secure finance for a client, if you have a similar scenario or something you'd like us to look at please get in contact with us on 0345 345 6788 or contact me directly at firstname.lastname@example.org.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.