A client approached us for help to refinance an apartment he had bought six months earlier with a refurbishment loan.
He had used short-term refurbishment finance because the apartment required some upgrading and was not in a suitable condition for immediate letting.
The client is in full-time employment and is also a landlord with a small portfolio.
Unfortunately his credit record showed that he had been declined a buy to let mortgage when he first bought the property, due to its non-habitable condition. This ruled out some lenders and because the property had yet to be let, this ruled out some more.
However, in the client’s favour, he was able to put up a 50% deposit, so there were still a few options available. We approached a lender who was willing to accept the application and the client opted for a three year fixed rate.
Here are the details of the deal:
Property value: £800,000
Loan amount: £400,000
Loan to value: 50%
Rate: 2.79% 3 year fixed
Term: 15 years interest only
Mortgage payment: £930 pcm
Rental income: £1,750 pcm
Gross yield: 2.6% pa
Lender arrangement fee: £995
Consultant: Jeni Browne, 01732 471647