Lending against open market value
MTF was approached by a borrower who had 10 days to complete on a buy-to-let investment property which he had agreed to buy off plan from a developer earlier this year, at a discounted price to its current market value.
He had been served a Notice to Complete by the developer and risked forfeiting a £50,000 deposit and his right to buy the newly completed flat if he could not raise the required funds.
The borrower was struggling to get a mortgage from a bank within the tight time-frame and against the property’s current market value.
His broker contacted MTF and due to the urgent circumstances we immediately had a valuation report commissioned and commenced with legal formalities.
While waiting for receipt of the report, the applicant who was abroad at the time, showed his commitment to comply with MTF’s Know Your Client requirements and flew back to London before completion to carry out the necessary checks.
In this instance, we assessed the borrower’s case and provided a £200,000 bridging loan, based on an open market value of £310,000, with no exit fee or early redemption penalty.
In just four days the client was able to complete on the purchase of the investment property, he also profited £54,000, the difference between the purchase price and the current market value- something he would have missed out on if he had gone down the mortgage route.
MTF is able to offer bridging loans quickly and on open market value, not just purchase price – an ideal solution for investors.