Last minute application on buy to let mortgage rate due for withdrawal

A client of ours forwarded one of our investor updates to his uncle, a self-employed taxi driver, who supplements his income with a portfolio of four investment properties which he owns personally.

The update was promoting an attractive, limited edition buy to let rate that was about to be withdrawn from the market. Eager to take advantage of such favourable terms, the uncle got in touch with us. The mortgage on one of his properties, a two-bedroom flat in London, was approaching the end of its introductory rate and he wanted to remortgage to avoid moving onto the lender’s SVR. He also wanted to raise further capital, £43k, to make refurbishments to some of his properties.

With little more than three hours to go before the rate was withdrawn from the market, we obtained a decision in principle. The uncle then confirmed he wished to submit a full application, which we managed to complete before the 8pm cut-off!

Thereafter, the case proceeded as normal although, an unexpectedly low property valuation brought the case dangerously close to the maximum LTV. Fortunately, the requested loan was still achievable and an offer was made 19 working days after application.

Here are the terms of the deal:

Property Details

Property value: £570,000

Loan amount: £370,000

LTV: 64.9%

Rate: 2.99% five-year fixed

Term: 20 years interest only

RTI calculation: 145% @ 2.99%

Borrower: Personal application

Lender arrangement fee: £11,100 (3%) added to the loan

Mortgage payment:  £947 pcm

Rental income: £1,600 pcm

Gross yield: 3.4% pa

Consultant: Gavin Richardson, 01732471613

30th June 2017