The Client: We were approached by a client in his mid-60s looking to purchase his eleventh buy to let property. The client retired five years ago and now spends his time managing his property portfolio. The client’s properties are held within his SPV Ltd Co.
The Property: A semi-detached house in East Sussex, which has been converted into three self-contained flats.
The Finance: The client was looking to borrow at 80% LTV on a 25-year interest only term. He had also requested a five-year fixed rate, which would protect him from any interest rate rises in the near future.
The Application Process: There were a few complications with this case which meant funding options would be restricted:
- The applicant is retired and relies on rental income as his main source of income
- The client would be in his late 80s at the end of the loan term
- Only a small proportion of lenders offer buy to let mortgages at 80% LTV
We sat down with a business manager from one of the specialist lenders, which offers the competitive terms required. Even though this lender imposes restrictions on income and age, we believed the underwriters would be willing to take a view due to the client’s high net worth and experience.
As predicted, the chosen lender agreed to consider the case. We worked with the client to package the documentation required to support the application, including ID, personal and business bank statements and a portfolio spreadsheet.
An offer was made within a month of applying.
Here are the details of the deal:
Property value: £275,000
Loan amount: £220,000
Rate: 3.80% 5 year fixed
Borrower: SPV Ltd Co
Term: 25 years interest only
Lender arrangement fee: 1% of loan amount (£2,200)
RTI: 130% @ 4%
Mortgage payment: £696.67pcm
Rental income: £1,333
Gross yield: 5.82% pa
Consultant: Gavin Richardson, 01732 471 613
27th April 2018