Full-time landlord remortgages leasehold flat where freehold is owned by related party

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

LTV: 75%

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


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