case studies

redeeming charge on semi-commercial property, RM14

client circumstances

Client was in the process of extending his semi-commercial property, consisting of a restaurant and 2-bed upper flat. The client required funds in order to redeem an existing first charge secured over the property but the lender who had originally agreed to redeem the loan could not proceed, as he had deviated from the original planning permission.

The original lender now required the works to be put right or for amended planning permission to be granted. The client was feeling the pressure and a fast transaction was required as the existing first charge loan was due for redemption in just a few weeks.  The client needed to buy some time whilst the council approved the new design.

MT Finance solution

Faced with roughly 3 weeks to deliver the funds, we immediately instructed our solicitors. The Covid-19 lockdown presented additional challenges. However, were able to utilise a retype of the existing valuation report to complete on the transaction, supported with an audit from one of our panel surveyors and the client enlisted assistance from a local solicitor who witnessed the legal mortgage. In just under 3 weeks, MT Finance provided a £260,000 bridging loan at 65% LTV. Interest was retained at 0.89% over 6 months. There were no early repayment penalties or exit fees.

the benefits

The client was able to redeem his existing first charge loan within the deadline, and the 6 month term gave him plenty of time to have the amended planning permission granted and opt for a term mortgage to repay our bridging loan.

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