We were approached by a broker looking to place an associated transaction for his client – an experienced landlord with a large portfolio of rental properties.
The client was hoping to remortgage one of her rental properties to raise a deposit and simultaneously purchase another from her husband’s limited company.
The client’s husband had recently decided to close down his manufacturing company within which he held numerous rental properties.
Keen to hold onto one of the properties, the wife had decided to purchase it from his company. On the advice of her accountant she had been advised to purchase the property in her personal name.
Achieving 80% LTV remortgaging her two-bed mews house, the landlord raised enough to purchase the desired property from her husband’s company (with a little extra left over for a further purchase). Both deals ran alongside each other and completed without a hitch.
Here are the details of the purchase.
Property value: £100,000
Loan amount: £75,000
Rate: 4.29% fixed for 3 years
Term: 10 years interest only
Mortgage payment: £270 pcm
Rental income: £500 pcm
Lender arrangement fee: 2% (£1,490)
Gross yield: 6.3% pa
Broker proc fee: 0.60% (£447)