Large Multi-Unit Freehold Block Re-Finance for Clients with Adverse Credit
The Clients: Applying through their SPV limited company, these experienced landlords used rental income to top their self-employed incomes.
The Property: Having purchased the large property in 2016, our clients had recently finished developing it into nine individual units. Situated in a popular South London town, perfect for professionals working locally or commuting into Central London, our clients had converted the units to a high specification in order to attract the best rent rates.
The Finance: The existing finance for the property was ending, and our clients wanted to secure a more competitive interest rate before running onto the lenders Standard Variable Rate (SVR). Securing a lower rate would decrease monthly repayments and maximize yield.
The Challenge: Firstly, as a multi-unit freehold block (MUFB) with nine individual units, we’d need to approach a specialist buy to let lender. Most lenders offering mortgages for MUFBs are comfortable up to six or seven units, and any more than that requires finance from a specific selection of buy to let lenders.
The second challenge was that one of the directors on the application had multiple black marks on their credit score, some of which were relatively recent. Bad credit scores can severely impact mortgage applications, so we’d need to understand the circumstances around the missed payments and source a lender that would accommodate it.
The Solution: Fortunately, we work a lot with the few specialist buy to let lenders that accept more than seven units in a MUFB. Having compared the available rates, we approached the one that offered the most financially suitable options for our clients' situation.
Having spoken to the applicant with bad credit, we thoroughly understood the situation that led to the defaults. We were upfront and explained the causes to the lender rather than trying to avoid it. Understanding the situation, the lender made an exception and offered the clients the mortgage they required. Here are the details: