Regulated auction purchase with legals completed in one day, SO51

Client circumstances:

Our client had submitted the winning bid on a residential auction property which they were intending to flip. A deposit had been paid and a private investor had supplied the client with a loan of £85,000 which was secured against their main residence and was going to fund the majority of the purchase. However, they needed a short-term fix to cover the short-fall, as well as fund the renovation. With the 28-day deadline to pay the final balance fast approaching, their broker got in touch.

MT Finance solution:

As our client was intending to live at the property during the renovation, this application was given to our regulated team. They received the case on the 2nd January and the valuation was instructed on the 5th. The checklist was issued the same day. The valuation report was received on the 11th and the costs undertaking on the 12th. The first legal replies from the client’s solicitor were received on the 17th.

Despite this delay, the solicitors managed to work through all enquiries in less than a day to meet the client’s deadline of 18th January. It was thanks to the strong working relationships we have with the solicitors that this was able to be completed within 24 hours, enabling us to issue a first charge bridging loan of £65,000. The loan-to-value was 65% of the open market value of £100,000 and the term was set for 12 months.

The benefits:

Thanks to our ability to move quickly – and the solicitors’ – we were able to meet the client’s deadline, saving both the purchase and their deposit. They will now move into the property and start the renovation. As they are a professional builder this will save both time and money. Once the works are complete they will sell the property at a substantial profit, allowing them to repay our bridging loan. If this takes less than 12 months then they won’t face any early repayment charges or exit fees.

Find out more:

If your client is in need of a regulated bridging loan then we are here to help. Lending decisions are made in a matter of hours and funds can often be released within days. Get in touch with us today to find out more.