We were approached by a full-time landlord wishing to remortgage a semi-commercial freehold property consisting of two flats above a takeaway food shop.
The property, located in Birmingham, is being remortgaged by the client in order to raise funds for further property investment.
Our choice of lender was restricted because many commercial funders will not accept mixed use properties with food outlets because they can be difficult to sell quickly.
Also, the landlord wanted an interest only deal, which further reduced the options.
However, because the landlord had 15 years’ experience of renting out mixed use premises, we found a lender that was willing to offer the following terms:
Property value: £200,000
Loan amount: £140,000
Loan to value: 70%
Rate: Lender’s LIBOR + 5.15% (5.90%)
Term: 10 years interest only
Mortgage payment: £688 pcm
Rental income: £1,500 pcm
Gross yield: 9% pa
Lender arrangement fee: 1.5% of loan amount (£2,100)
Consultant: Jeni Browne, 01732 471647