preventing a chain break on a BTL property, SE4
Our client was partway through purchasing a residential property which they were intending to rent out when the mortgage market was thrown into disarray after September’s mini-Budget. As a result of the ensuing uncertainty, the client’s lender withdrew their offer. With less than a month until they were due to complete, they urgently needed to raise £339,500 to ensure the purchase didn’t fall through. Knowing that the process would be significantly longer with a high street lender, their broker immediately contacted us.
MT Finance solution:
As the previous lender had recently undertaken an inspection of the property, we were able to accept for the report to be re-addressed, which saved a significant amount of time. After this and the quality check were obtained, we were able to issue the checklist of legal requirements. The return of these enabled us to complete a first charge bridging loan of £339,500 at 70% loan-to-value of the property’s open market value of £485,000. Interest was retained at 0.89% over an eight-month term. This was our standard interest rate for a loan with a 70% LTV at the time of completion.
Thanks to our ability to move quickly, we completed on time as per the client’s deadline. This allowed them to purchase the property and add to their rental portfolio. As no works are needed, the client will be able to find a new tenant as soon as possible and start generating an additional source of income. The eight-month term will provide them with enough time to refinance onto a longer-term BTL mortgage. If they are able to secure this before the end of their loan, they won’t face any exit fees or early repayment charges.