The Client: An experienced landlord with fewer than four buy to let properties. Slightly older than the standard retirement age, our client was considered an older applicant by lenders.
The Property: A one-bedroom flat on the outskirts of a popular Northern city. Its prime location to the city centre and proximity to local amenities generated substantial rental demand.
The Finance: Our client was hoping to capital raise against this property to consolidate their personal debts incurred by relocating to a new area. They required a 40% LTV, interest-only mortgage in their personal name.
The Challenge: There were two main challenges with this case. Firstly, our client wanted to use the funds to pay off their personal debts, which made many lenders wary of their financial stability. Consequently, the number of lenders we had access to was reduced , and plausible rationale to explain the debt consolidation was required to justify the use of the funds when presenting the case to the lender
Secondly, Lenders will have either an upper age limit for the client at the start of the application, or a maximum age limit at which the loan must be repaid, as our client was already over the State retirement age this increased the challenge of finding a suitable lender.
The Solution: With our experience and extensive knowledge of the whole of the BTL market, we understood and quickly overcame these challenges. We sourced a lender with expertise in both these circumstances. Working with our client our well-structured application and supporting documentation resulted in an offer from the lender the very next day. Here are the details:
Property value: £100,000
Loan amount: £40,000
Rate: 2.93%, 5-year fixed
Term: 9-years, interest-only
Mortgage payment: £97 per calendar month
Lender arrangement fee: None
Rental income: £550 per calendar month
Gross yield: 6.6% per annum
27th July 2022