The Client: An experienced landlord seeking to expand her existing portfolio. In order to purchase this property in partnership with her brother, the pair had set up a new SPV limited company.
The Property: A one-bedroom flat located within commuting distance of Edinburgh. The property benefitted from many local amenities and transport links.
The Finance: With a 25% deposit formed from savings and equity released from another investment property, our client required a 75% LTV limited company buy to let mortgage to complete the purchase.
The Challenge: The main challenge with this case was the property value. At only £67,000, it was below many lenders’ minimum property value and, therefore, loan size.
Furthermore, as the property was located in Scotland, this would further restrict which lenders we’d be able to consider. As the property purchase process is quite different to England and Wales, some lenders do not include Scotland in criteria.
The Solution: With full market access, we could shortlist buy to let lenders that accepted limited company applications for properties in Scotland. From this list, we researched the details of the criteria to ascertain which lenders could accommodate the low loan requirement and then sought the most cost-efficient buy to let mortgage. Despite the complex challenges, we were able to get the case to completion in just seven weeks. Here are the details:
Property value: £67,000
Loan amount: £50,250
Rate: 3.34% two-year fixed
Term: 15 years, interest-only
Mortgage payment: £142 per calendar month
Lender arrangement fee: £995
Rental income: £425 per calendar month
Gross yield: 7.6% per annum
Application: SPV Limited Company
Consultant: Andy McOwat, 01625 416396
28th July 2021