Refinance of two houses for newly trading Ltd Company
A broker approached us for help in finding a provider that accepts trading limited companies which have been trading for a short period.
The broker’s client is the sole director of the company which was set up in the autumn of 2013 which means it has less than two years’ trading accounts.
The business was established to develop residential properties, some for selling on and some for renting out.
Looking to repay a development loan on two semi-detached houses (attached to each other), the broker was struggling to find a lender which would accept the company’s short trading record.
The fact that the properties were owned on a single freehold title that would be split into two, further reduced the number of funders willing to consider the case.
One specialist lender; however, took the view that because the director already personally owned other rental property which he had successfully refurbished, both he and the properties in question were a good risk.
Here are the details of the deal:
| Property 1 (3bed) | Property 2 (2bed) | |
| Property value: | £195,000 | £170,000 |
| Loan amount: | £156,000 | £146,250 |
| LTV: | 80% | 75% |
| Rate: | 5.14% loan term tracker | 5.14% loan term tracker |
| Term: | 20 years interest only | 20 years interest only |
| Mortgage payment: | £668 pcm | £626 pcm |
| Rental income: | £900 pcm | £750 pcm |
| Gross yield: | 5.5% pa | 5.3% pa |
| Lender arrangement fee: | 2.75% (£4290) | 2.75% (£4015 |
| Consultant: | James Powell | |
| Consultant tel: | 01732 471651 | |
21st July 2015
