The client is a full-time landlord with more than 15 years of experience. He was looking to remortgage a two-bed leasehold flat in order to raise funds for further buy to let investment.
The flat is in a block of six, all of which are owned on separate leaseholds by the client.
The client also owns 50% of the freehold and his wife owns the other 50%.
Most lenders will stay away from this type of transaction because they prefer the freeholder and the leaseholder to be unrelated.
However, we were able to source funding from a specialist lender which offered the following deal for our client:
Property value: £150,000
Loan amount: £112,500
Product: 3.89% 3 year fixed
Term: 20 years interest only
Mortgage payments: £365 pcm
Rental income: £750 pcm
Lender arrangement fee: 1.5% of loan amount (£1,688)
Gross yield: 6% pa