Client circumstances:
Our client – a first time landlord, was in the process of purchasing a residential buy-to-let property via their newly formed limited company. The property was being purchased from their spouse who had previously taken out a regulated bridging loan from MT Finance. Having been happy with the service we provided on the bridge finance, our client instructed their broker to reach out to our buy-to-let team to facilitate the purchase.
MT Finance solution:
To partially fund the purchase, a deposit of £530,000 was being transferred to our client’s limited company from their spouse by way of gifted equity in security. As this was viewed as a gifted asset, it was essential that there was a business relationship between the spouse and the company. Working alongside our client and their broker, we proposed adding the spouse as a shareholder. This satisfied our due diligence check with regards to the source of the deposit and, as a minority shareholder we didn’t need to view them as an applicant.
Once the company restructuring was complete, we were able to continue with the application. Working to a tight deadline aligning to the bridging loan redemption date, we issued a buy-to-let mortgage of £224,435 at 30% loan-to-value of the property’s confirmed value of £750,000. The term was set for 25 years.
The benefits:
Thanks to our flexible approach, we were able to take a view on the gifted equity and work alongside the client, their spouse and the broker to find a solution that made sense and allowed the case to complete. This meant that the spouse could repay their bridging loan without incurring any financial penalties.
The client can now look to generate income from their rental property.
Find out more:
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