Commercial mortgage for landlords getting into holiday lets
The clients: A married couple with significant experience in commercial property letting. They have a considerable property portfolio made up of commercial investments and now they are looking to get into the holiday letting business.
The property: A 4-bed, 4-bath detached house with a 2-bed annex and a barn conversion. The property was recently refurbished to the highest of standards. It is situated in Wales and features beautiful views over a nearby estuary – the perfect holiday destination!
The finance: The clients wanted to purchase the property and requested 70% loan to value with interest only terms. They were completing this transaction in partnership.
The application process: Usually lenders will ask for formal accounts and management information for the holiday letting business. As limited financial information was available, a specialist holiday letting agent helped the clients to create the projections. We also gathered further information and arranged a meeting with the lender at our offices. Supporting information included:
- Proof of income – last two years
- Details of their entire portfolio including financial accounts. It was noted that the couple own numerous properties some distance from their home. This was helpful in proving to the lender that they were capable of managing property from a distance.
- Business and personal bank statements for six months
Looking at the projections the lender agreed in principle that the figures stacked up and the application was worthy of their support. The bank meeting was held at our offices in Kings Hill.
Following the lender meeting a valuation was carried out which confirmed that the property would make a very good holiday let and could also be let on a standard AST rental if necessary. Just four weeks after submitting the loan application a formal mortgage offer was made on the following terms.
The deal is expected to complete within the next month. Here are the details: