case studies

Second charge refinance to repay existing bridge, KT13

Client circumstances:

Our client was a businessperson who owned a wholesale clothing company. Having lost a large portion of their stock to a fire, they had taken out a second charge bridging loan with another lender to help replace what had been damaged. While they had planned to sell their main residence to exit the bridging loan, they had not yet received a satisfactory offer. With time running out, they urgently needed £169,000 to repay their existing bridging loan and avoid any late payment charges. Knowing our ability to move quickly, their broker immediately contacted us.


MT Finance solution:

Having received the case on 5th May, our underwriting team quickly got to work. The valuation was instructed just hours later and the inspection took place the next working day. The report was issued in only three days and the redemption statement from the first charge lender was sent to us a day later. This ensured that the combined loan-to-value didn’t exceed our maximum. The next working day – the 15th – the lender consented to our second charge. Legals began on the 16th. On the 31st May we completed a second charge bridging loan of £169,000 at a combined LTV of 65% against the property’s open market value of £1,350,000. The term was set for nine months.


The benefits:

With the client facing such a tight deadline to repay their existing bridging loan, it was vital that we were able to move quickly. Our strong relationships with the valuers and the solicitors enabled us to do just this and complete before their deadline. The borrower was then able to go on to redeem the bridging loan and not face any financial penalties.

They will look to exit out of our bridging loan by selling their main residence but if they do not achieve the desired asking price – which happened previously – then they will look to sell some additional properties in their portfolio. The nine-month term gives them plenty of time to achieve either of these outcomes and if the sale – or sales – proceed sooner then they won’t face any exit fees or early repayment charges.

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