We were approached by a broker whose client was looking to refinance a 4-bed terraced house in London he had bought at auction with a bridging loan.
When purchased, the property was not habitable so did not qualify for a buy to let mortgage but now that it had been refurbished and let to tenants, the client was keen to refinance onto a cheaper, longer term rate.
The broker brought the deal to Keystone because:
The underwriters were happy with the client’s circumstances and so surveyors were booked to value the property. Despite the refurbishment works, the valuation report found that the property still had both damp and timber problems.
A formal offer was extended to the client subject to a retention of funds which would only be released once the damp and timber problems had been rectified and signed off on re-inspection.
Here are the details:
Property value: £850,000
Loan amount: £600,000
Rate: 3.99% 5 year fixed
Term: 25 years, interest only
RTI: 125% @ 3.99%
Product: Classic Range
Borrower: SPV Ltd Co
Lender arrangement fee: 2% (£12,000)
Mortgage payment: £2,028 pcm
Rental income: £3,600 pcm
Gross yield: 5.08% pa
Broker proc fee: 0.6% (£3,600)