We were approached by a broker looking for help in sourcing a commercial owner-occupier mortgage for his clients - two directors and equal shareholders of a trading limited company.
The company specialises in sourcing locations for shooting a range of productions for both film and television.
Wanting to move out of their currently rented premises, the directors had set their sights on large commercial unit just 15 minutes away and were looking to purchase it with a deposit of 20%.
Before approaching Mortgages for Business, the broker had approached the company’s bank, but had been declined due to the high loan to value requested.
The broker needed to receive credit backed terms quickly, as the vendors didn’t want to take the property off the market, so he approached Mortgages for Business to help him find the right lender to get the case across the line swiftly.
We took the case to one of the high-street banks with whom we have a strong relationship with. For an initial offer the client was asked to provide the following:
- Photo ID for both directors
- Completed application form
- Trading Ltd Co’s last 3 years’ full accounts
- Company strategy in respect of the office move & expansion
The bank offered the directors 80% LTV and a six month term VAT loan to help with cash flow.
The directors had asked if a loan to cover the VAT of the purchase would be possible, as they would be able to claim back the VAT shortly as they would soon be operating a VAT-registered business.
The client received credit backed terms within 14 days and a valuation was carried out the following week.
Here are the details of the deal:
Property value: £710,000
Loan amount: £568,000
VAT loan amount: £142,000 (not included in LTV)
Rate: 2.75% above Bank Rate (3%)
Main loan: 20 years capital and interest
VAT loan: 6 months capital and interest
Lender arrangement fee: 2% (£14,200)
Mortgage payment: £3,150 pcm (VAT loan paid back via bullet repayment from VAT refund)
Broker proc fee: 0.5% (£3,550)
Consultant: Paul Keddy, 01732 471655
2nd June 2017