The Client: A self-employed orthodontist who had always run his profitable business from rented premises. He wished to purchase a permanent property for his practice to avoid having to pay unnecessary rent.
The Property: Previously a two-bedroom residential property in a city centre, it had been converted into a small medical premises. With excellent transport links and close to their existing practice, it was our client’s ideal property.
The Finance: Using savings from his business’ profits as a deposit, our client required a commercial mortgage to complete the purchase of the property, and was seeking as high a loan to value as possible.
The Challenge: When our client first approached us in the Spring of 2020, many commercial mortgage lenders were tightening up criteria (or not lending at all) in reaction to the national lockdown. Furthermore, our client’s requirement for a high LTV and the fact his practice had to close during the lockdown meant that we’d have even more of a challenge sourcing an appropriate lender who’d consider the case at all.
In addition, as the property was in a desirable city location, we’d need to quickly source the finance to secure the purchase.
The Solution: Even under normal circumstances, this would have been tricky due to the high loan to value requirement. However, in the turbulent mortgage market, we had to draw on our extensive knowledge of the commercial mortgage market to source a suitable lender. After some research, we managed to find a lender still offering 85% LTV commercial mortgages, and contacted them to discuss the case. Based on the businesses record of healthy profits, the lender was happy to finance the purchase despite its lockdown closure and took on board our need for a quick process. With a competitive mortgage offer in place, our client secured the purchase and is thrilled to own premises for his dental practice. Here are the details:
Property value: £985,000
Loan amount: £837,000
Rate: 2.5% variable (2.4% + BBR)
Term: 20 years, capital and interest
Mortgage payment: £4,438 per calendar month
Lender arrangement fee: 1.5% (£12,555 added to loan)
Application: Trading Limited Company
Consultant: Paul Keddy, 01732 471655
13th January 2021