Multi-Property Capital Raise to Fund Dream Home Purchase

Multi-Property Capital Raise to Fund Dream Home Purchase

12.01.22 | Written by: Sam Holder

The Client: A working professional with three existing buy to let properties, who was looking to purchase their dream home.

The Property: The property was a three-bedroom flat, in a modern and high spec development on the outskirts of London city centre.

The Finance: Using a combination of savings and equity from her buy to let properties, our client had a significant deposit. Consequently, she was looking for a 42% LTV mortgage to complete the purchase.

The Challenge: In order to increase our client’s deposit and secure the low LTV mortgage, we needed to release an additional £350,000 of capital from her buy to let properties and existing home. This would include remortgaging two buy to lets and refinancing her existing home in a let to buy process.

With two mortgaged buy to let properties and a mortgage on her existing home, the new purchase would make her a portfolio landlord, meaning that some lenders would not consider the application. Furthermore, by retaining her existing home as a rental property, we’d need a lender comfortable with the let to buy process.

To make this case work, we’d need to complete the different refinance cases in the right order to complete the purchase of the new flat. This would require a lot of administrative support from us to ensure all the lenders and solicitors worked together.

The Solution: Through our extensive experience working with portfolio landlords, we quickly identified the solution to this challenge. By reviewing our client’s property portfolio, we quickly identified the most suitable ways to raise capital through remortgages that would still maximise rental profits.

The first property to refinance was our client’s original residential home. We successfully secured a lender to complete the let to buy application, allowing us to release £70,000 in equity towards the new home’s deposit. The property will also earn our client £1,400 rent per month (gross) as an additional income.

We chose to re-mortgage one of her two existing mortgaged buy to let properties. From this, our client gained a total of £80,000 for their new purchase. We decided to leave equity in the other to maintain a low loan to value across her whole portfolio, which gave her access to more lenders and better rates.

The fourth buy to let property was co-owned with the client’s parents and unencumbered. We had to source a lender that would allow a re-mortgage with three applicants, and for the equity taken out of the property to only go to one of the applicants. We successfully secured this using a specialist lender, raising the remaining £200,000 needed for her new home’s deposit.

Not only did we secure the total money necessary to complete our client’s purchase, but we also ensured that each remortgage benefited from a lower interest rate than what it was previously on. This maximised our client’s rental income and saved her money in the long term.

If you’re looking to purchase a new property, as a home or an investment, we have decades of experience in capital raising and securing the most appropriate mortgages for your circumstances. With full market access, we have a better chance of securing a lender suitable for your mortgage needs, so please get in touch today. Here are the details of our client’s properties:

New residential property

Property value: £700,000

Loan amount: £300,000

LTV: 42%

Rate: 1.13% 5-year fixed

Term: 22 years, capital & interest

Mortgage payment:  £ 1,288 per calendar month

Lender arrangement fee: £995

 

Let to buy property:

Property value: £400,000

Loan amount: £220,000

LTV: 55%

Rate: 2.24% 5-years fixed, interest-only

Mortgage payment:  £412 per calendar month

Rental income: £1,400 per calendar month

Lender arrangement fee: £995

Application: Individual

 

Buy to let property:

Property value: £320,000

Loan amount: £140,000

LTV: 43%

Rate: 1.65% 5-years fixed, interest-only

Mortgage payment:  £193 per calendar month

Rental income: £975 per calendar month

Lender arrangement fee: £995

Application: Individual

 

Buy to let property co-owned with parents:

Property value: £450,000

Loan amount: £200,000

LTV: 44%

Rate: 1.65% 5-years fixed, interest-only

Mortgage payment:  £276 per calendar month

Rental income: £1,250 per calendar month

Lender arrangement fee: £995

Application: Individual

Consultant: Sam Holder, 01732 471659

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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