The clients are a married couple who own two buy to let properties in an SPV limited company, although they don’t own their own home.
One of the properties is owned outright, the other, a terrace house in a large Lancashire town, has a small mortgage on it.
The husband, 71, is retired and receives an income in excess of £25k pa. The wife works full-time.
They approached us for help in refinancing the mortgaged property so that they could release equity to expand their portfolio.
Our challenge in finding a lender was three-fold – as many lenders
1. Insist that borrowers own their own home
2. Will not provide finance to SPVs
3. Only provide finance to borrowers up to 75 years of age – the couple wanted a longer term.
Finding a lender that would accept all three nuances of the case did reduce the options; however, we found a specialist that was prepared to help on the condition that the specialist become the sole lender to the SPV.
Here are the details:
Property value: £225,000
Loan amount: £135,000
LTV: 60%
Product: 3.75% 2 years fixed
Term: 9 years interest only
Rental income: £795 pcm
Gross yield: 4.2% pa
Mortgage payments: £422 pcm
Lender arrangement fee: 2% (£2,700)
Consultant: Gavin Elley
Consultant tel: 01625 416390
