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Capital Raise for Portfolio Application

Capital Raise for Portfolio Application

The Clients: Two professional landlords with experience in property development and buy to lets.  

The Properties: Our clients already owned the two three-bedroom properties in a town commuting distance from a Northern city. Whilst these were on two separate titles, they were structured under one mortgage as a portfolio application.

The Finance: We were looking to secure a capital raise for our clients by refinancing the current loan. They would use this funding to purchase further buy to let properties.

The Challenge: As our clients were thinking of the future of their investment portfolio, they were hoping to source a competitive rate with minimal fees to keep costs low ahead of their next purchase. However, a portfolio application such as this raises a challenge in finding a suitable lender. Whilst this structure can prove administratively beneficial to landlords, with only one application form and fee for numerous properties, many lenders are wary about moving forward with these cases. The resale of properties becomes overly complex as, with just one loan, landlords will have to restructure their portfolios just to sell one property. As such, finding a lender happy to work on this as well as a competitive rate that our clients would accept would prove difficult.

The Solution: Our whole of market access and knowledge of the specialist lending market means that we knew which lenders to approach with this case. From experience, we recognised one in particular that was very comfortable offering on multiple properties under one security and offered discounts on these types of products. As such, we quickly sourced our clients a deal with a reduced rate, no arrangement fee, assisted legal fees, and a free valuation. Our clients were more than happy to proceed with this deal and keep these properties under this structure. Here are the details:

Property Details

Property value: £310,000

Loan amount: £232,500

LTV: 75%

Rate: 3.28% 5 years fixed term

Term: 25 years, interest-only

Mortgage payment:  £636 per calendar month

Lender arrangement fee: Free

Rental income: £1,250 per calendar month

Gross yield: 5 % per annum

Application: SPV Limited Company

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

Mortgages for Business Ltd is registered
in England and Wales No. 2502713.

Registered office:
17 Kings Hill Avenue,
Kings Hill, West Malling,
ME19 4UA.

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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.

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