Limited company refinances converted multi-unit

Our customer, a professional property investor and director of a trading limited company was looking to raise capital on a converted residential investment property held in the company name.

The property was a former retail unit with living accommodation above, which had been owned for a number of years. Following conversion into two separate flats the property had increased in value significantly and the applicant now wished to extract equity from this property in order to fund further expansion of their property portfolio.

We were able to source a lender that would lend to a trading limited company at up to 75% of the freehold property value, thus maximising the amount that could be borrowed.

The applicant was then able to purchase a further investment property that we were also able to arrange funding on.

Here are the details of the deal:

Property value: £400,000

Loan amount: £300,000

Loan to value: 75%

Rate: 4.39% term tracker

Term: 10 years interest only

Monthly mortgage payment: £1,097

Monthly rental income: £2,200 (combined rental income of the two flats)

Annual gross yield: 6.60%

Lender arrangement fee: 2.5%

Consultant: Nick Helm 01732 471608

29th April 2015