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First-time landlords purchase 6-bed HMO via newly established SPV

First-time landlords purchase 6-bed HMO via newly established SPV

Two brothers contacted us for help in finding finance to purchase their first rental property – a six bed HMO in Swansea.

The brothers were hoping for this property to be their first of many, so had set up an SPV limited company through which they would make this and all subsequent purchases.

There were two main challenges with this case that would limit the number of finance options available.

  1. Both brothers are first-time landlords. Most lenders like to see experience, especially when it comes to renting out HMO property

  2. The brothers were planning to rent the property to students

We approached one of the specialist lenders which we knew would consider the case. Happy that the brothers were a good risk, the following terms were offered.

 

Property Details


Property value
: £225,000

Loan amount: £168,750

LTV: 75%

Rate: 3.49% 2 year discounted

Term: 20 years interest only

RTI: 125% @ 5.25%

Borrower: SPV Ltd Company

Lender arrangement fee: 1.5% (£2,531)

Mortgage payment: £498 pcm

Rental income: £1,500 pcm

Gross yield: 8% 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

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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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