Portfolio landlords borrowing via SPV raise capital against 6-bed HMO

The Clients: Two brothers with a joint portfolio of over 15 rental properties – all held within their SPV Ltd Co. As well as managing their property portfolio, both applicants are self-employed working within the legal sector.
The brothers were looking to raise capital against one of their rental properties. They planned to use the capital raised to make a further buy to let purchase.

The Property: The property the brothers were looking to raise finance against is a six-bed HMO currently let to students. A sought-after location, the licensed HMO is just a 10-minute drive from Liverpool city centre.

The Finance: The brothers were looking to raise £224,000 against the property, which meant borrowing at 75% loan to value. The brothers had also requested a five-year fixed rate, which would protect them from any interest rate
rises in the near future.

The Application Process: We decide to approach Keystone Property Finance with the case for the following reasons:

1. Portfolio landlords accepted. Keystone accepts portfolio landlords and has no limit on the number of buy to let mortgage an applicant can hold with other lenders.
2. Same pricing for individuals and Ltd Co’s. All of Keystone’s rates are priced the same whether borrowing is made personally, via an SPV or via a trading limited company.
3. Students accepted as tenants. Only a third of buy to let lenders have mortgages for SPVs letting out to students.
4. HMOs up to 8-beds. Less than half of buy to let lenders lend on HMO property.

We sat down with one of the underwriters at Keystone and explained the case. Happy that the brothers were a good risk, terms were offered within four weeks of the initial application. The case is due to complete shortly.

Here are the details of the deal:

Property Details

Property value: £280,000

Loan amount: £224,000

LTV: 75%

Rate: 4.19% 5 Year Fixed

Borrower: SPV Ltd Co’

Term: 25 years interest only

RTI: 125% @ 4.19%

Lender arrangement fee: 2% (£4,480 added to loan)

Mortgage payment: £782 pcm

Rental income: £2,800 pcm

Gross yield: 12% pa

Consultant: Jeni Browne, 01732 471647

Keystone Property Finance is an intermediary only lender, which specialises in complex buy to let mortgage applications. For more information on rates and terms give us a call today on 0345 345 6788.

10th April 2018