Situation:
The client was in the process of buying a new investment property via an auction and needed to raise £1 million pound for the deposit. The balance of the purchase was being funded by a standard BTL mortgage which was already in place. The client had cash available for the deposit however with the current market conditions, was not comfortable to over-commit and was looking to minimise the amount of personal cash invested.
Challenges:
Buying at auction meant the client was given a 4 week deadline to complete. The client had already exhausted standard BTL mortgage options to obtain the maximum amount possible. Their main residence was worth £9 million with a £3 million mortgage outstanding which had early exit fees but also could not be increased due to the current income situation.
Solution:
Up against other brokers, we quickly negotiated the most favourable terms to the client by offering not only a bridging solution to acquire the property, but also an exit strategy. To obtain the bridge, we needed to show how this would be repaid which the other brokers were not able to offer. In this case, we provided an agreement in principle through a private bank to refinance their main residence once they were outside of any early repayment charges which would repay both the first and second charge on a more competitive rate.
Key figures:
Property value: £ 9million
Loan amount: £1 million
Interest rate: 0.89% per month
Arrangement fee: 1%