We were approached by a broker whose client, a portfolio landlord and director of a project management company, was looking to raise finance against one of his investment properties.
The property in question is an unencumbered 2-bed flat within a newly built, eight-storey block in Salford which the client had purchased five months previously via the limited company through which he operates his project management business.
The company’s trading accounts had suffered in the past few months due to an unexpected expense, so the broker needed to find a lender which would take a common-sense approach to underwriting.
The broker approached Keystone for the following reasons:
After examining the client’s business accounts and property portfolio, the Keystone underwriters agreed that the recent business accounts could be overlooked and, because the property and entire portfolio generates a good level of income, offered the following terms:
Property value: £175,000
Loan amount: £131,250
Rate: 3.99% 5 year fixed rate - from the
Term: 25 years, interest only
RTI: 125% @ 3.99%s
Borrower: trading Ltd company
Mortgage payment: £443.60 pcm
Lender arrangement fee: 2% added to the loan (£2,625)
Rental income: £950 pcm
Gross yield: 6.5% pa
Broker proc fee: 0.6% (£788)