first charge auction purchase and refurb, NG7
Client circumstances:
Our client was the winning bidder of an unoccupied residential property which had a value of £100,000. They had already put down a deposit of £30,000 but urgently needed the remaining £70,000 to secure the property, which they were planning to rent out once the purchase was complete. As is standard practice for most auctions, our client had 28 days to pay the remaining balance or risk losing the property. Unable to approach a mainstream lender due to time constraints, their broker immediately contacted us.
MT Finance solution:
Our underwriting team received the case three working days after signing the contract at auction and they immediately got to work. The valuation was instructed the same day and took place later that week. The report was received within two working days. As the property needed some works doing to it, the client wanted to view and assess the valuation before proceeding with the legals.
Nearly two weeks after receiving the valuation, we were given the go ahead to proceed with the legals checks. Our deadline to complete was now only three days away. Despite this tight deadline, we were able to complete before the end of the 28 days and issue a first charge bridging loan of £70,000. The loan-to-value was 70% over a nine-month term.
The benefits:
Our ability to issue a first charge bridging loan by the client’s deadline ensured that they could complete the purchase of the auction property, as well as saving their deposit. The works needed to be done to the property are light and can be undertaken by the client and their family, saving both time and money. Once complete, the client will refinance out of our bridging loan with a traditional buy-to-let mortgage against the property’s higher value. If this happens before the end of the term they won’t face any early repayment charges or exit fees, allowing for greater flexibility.
