case studies

cross charge auction purchase, BS16

client circumstances

Client required funds to complete the purchase of a recently renovated 6 unit HMO at auction. The property presented a high yielding investment opportunity. The client had been served notice on the auction purchase and time was running out and he faced risking his deposit.

MT Finance solution

Our client owned numerous buy-to-let properties and was looking to leverage 5 of them to raise funds for the purchase.

We proceeded to take 2nd charges over the assets and valuers were instructed immediately. However, consent was not granted from the 1st charge lender on three of the client’s properties. We re-structured the case and offered to take a 1st charge, thus redeeming the existing lenders on those properties; & additionally adding their main residence to increase funds. In the end we did three 1st charges over BTL property and two 2nd charges- which included the client’s main residence.

As we had added the client’s main residence- we had to instruct additional valuation immediately.  The Covid-19 lockdown presented additional challenges- the surveyor conducted the valuations in a controlled environment and worked around the clock to get the reports back to us urgently. The client enlisted assistance from a local solicitor who witnessed the legal mortgage and sent it to the acting solicitor in London.

In 9 days, MT Finance completed a £868,000 cross charge short-term loan across five of the client’s properties at 62% LTV. Interest was retained at 0.89% over a 10-month period and as with all our loans, there was no exit fee or ERC and no personal guarantee was required.

the benefits

Our short-term loan meant the client was able to purchase the high yielding investment property. What’s more, the 10-month term will give them plenty of time to refinance the asset with a HMO mortgage lender.

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