Bridge to let for First Time Buy to Let Landlord

Bridge to Let for First Time Buy to Let Landlord

06.01.21 | Written by: Narinder Gill

The Client: A first-time landlord, our client had a high-income which he wished to invest in property. He’d set up a limited company with which to purchase buy to let property.

The Property: In need of a lot of cosmetic refurbishment, the two-bedroom bungalow was situated in a suburban area in the West of England. The client had refurbished the property to a high standard, and with excellent transport links to the nearby city centre, it was an ideal rental property.

The Finance: Due to the property’s condition, the client could not secure a buy to let mortgage upon purchasing the property. Consequently, he had bought the property for £110,000 with bridging finance. Now the refurbishment works were complete, he wished to pay off by refinancing onto a buy to let mortgage and raise capital out of the new, uplifted value for further investments.

The Challenge: Eager to exit the bridging finance arrangement, which is often more expensive than term mortgages, time was a primary factor in this case. However, the ongoing pandemic impacted lender service times and meant valuations could not be booked in as quickly as usual. We needed to find a lender who would be able to move quickly and do everything we could to make sure the application moved along in a timely manner for our client.

Pandemic aside, despite his high-income, our client was a first-time landlord, which would exclude him from several buy to let lenders. Therefore, we’d have a smaller selection of lenders to choose from for our client.

The Solution: We constantly monitor lender service times which allows us to quickly identify which are suitable to use for more time pressured cases. Using this knowledge, we sourced a small selection of buy to let lenders which would accept our first-time landlord client and process the buy to let mortgage application quickly.

While we have little control over booking valuations, we were able to speak to the lender and put across the argument that this property should be booked in as quickly as possible for the client’s benefit. Due to this, the buy to let mortgage was offered in little over a month and moved quickly through to completion, much to the client’s delight. Here are the details:

Property value: £190,000

Loan amount: £140,000

LTV: 73%

Rate: 3.49% two-year fixed

Term: 25 years, interest-only

Mortgage payment: £412 per calendar month

Lender arrangement fee: 1.5% added to loan (£2,100)

Rental income: £800 per calendar month

Application: Limited Company

Consultant: Narinder Gill, 01732 471 604

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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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