A broker approached us for help arranging finance for clients who wanted to transfer the ownership of a holiday cottage from their personal names into a newly created SPV limited company.
The clients are business owners in their own right and they also own a number of rental properties.
The property is a 4-bed terrace cottage in Keswick in the heart of the Lake District.
We found a lender that was willing to consider the case. Unfortunately the valuation returned a slightly reduced figure for the property which meant that the maximum loan to value was slightly reduced.
In order to secure the maximum possible LTV we submitted the last two years’ rental income in order that the lender could calculate a new debt service ratio.
The lender accepted the rental income and issued terms at 75% LTV. Here are the details of the deal:
Property value: £350,000
Loan amount: £262,500
Rent: £2,170 pcm
Rate: Lender’s LIBOR (0.75%) + 4.85%
Term: 10 years interest only
Monthly mortgage payment: £1,225
Lender arrangement fee: £3,806
Completion date: October 2014
Consultant: Gareth Richards, 01732 471627 or 07815647452
This is just one example of how I've helped a broker source finance for their client. To see more of my case studies please visit my profile page. My direct line and email address can be found below.