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Limited Company Remortgaging with Capital Raising for renovations – Case Study

The Client:

The client was part owner of a Limited Company with a multiple directors. The property was owned by the limited Company and was a listed building which had previously been converted for use; partly to house their information technology company and the remainder would be used for either office space or lettable accommodation – this was to be decided once additional funding had been secured.

Scenario:

The client wished to raise additional funds to complete necessary conversion works and also secure more favourable terms than their current lender. Current lender was no longer willing to extend further finance due to the intended conversion works on the property and the nature of the building itself.

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The Solution:

We sought out a specialist lender who was able to accommodate the building type, the ownership via a Limited Company and the intended conversion works while still obtaining very favourable market rates.

We checked all criteria with the lender were able to secure terms with a minimum of paperwork and a very quick turnaround time.

Summary:

Lenders can be cautious of conversion and renovation projects, especially on listed buildings. Those that will accept often have much higher rates on offer, however as a whole of market Broker we have the tools to find a solution for these clients at much more favourable rates then they may have previously been quoted.

Speak to us today to speak with one of our CeMAP qualified Mortgage Advisors. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Bridge to Bridge Refinance – Case Study

The Client:

The client’s objective was to remortgage his Consumer Buy to Let property to repay the temporary Bridging Finance in place.  They had already taken an extension to repay the Bridge and were running out of time.  The bridging lender was threatening to take action to force sale of the property due to exceeding the term of the bridging finance, therefore client needed to move fast.

The Scenario:

On assessing the application, the bridging finance in place was a cross-charge over two properties, with most of the amount to be repaid secured against the client’s Consumer Buy to Let property.  The affordability of the remortgage was failing, so it was agreed with the bridging company that the client could repay the charge against the Consumer Buy to Let property for £455,000, which would leave the remaining funds as a charge against the client’s residential property.

Contact us today to discuss Bridging Loans and how we can assist you.

The Solution:

The remaining funds of the bridge remained as a charge against the client’s residential property under new bridging terms, allowing the client to take another 12-month bridge with the same bridging lender.  This reduced the risk of the bridging lender forcing a sale of their residential property.  

A remortgage for £671,000 was secured for the client against the Consumer Buy to Let property and the affordability was self-funding from the rental income. £455,000 was used to repay the bridge and the remaining funds to repay the existing mortgage balance.

The client’s income would have increased substantially by the time the bridge was due to be repaid on the residential property which helps the client to remortgage the residential property to repay the remaining balance of the bridge.

The customer was then able to keep both properties and force of sale was eliminated.

Summary:

Even when our clients feel they have no options available to them other then the resale of properties we can assist as a whole of market Broker and find solutions for some of the most complex cases.

Please get in touch today with our dedicated team of Specialist Mortgage Advisers for any Bridging Finance or Commercial Finance enquiries or questions you might have. Call us now on 03303 112 646. Alternatively, you can also fill in this short online form and we will get back to you straight away.

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Expat Limited Company Buy to Let Remortgage – Case Study

The Client:

The client had a large portfolio of 17 properties. The properties were of mixed ownership comprising of personal name, Limited Company with his wife and Limited Company with his sister. Clients’ sister lives in Australia and although a Shareholder of the Limited Company, not an active Director.

The Scenario:

Two of the properties under the Limited Company entity with client’s sister as 50/50 Shareholder were coming to the end of their fixed rate, therefore required remortgaging. These were previously done through Commercial Finance Network on Expat mortgage basis, which required both applicants to be on the application. The task here was to find the best possible deal, in a difficult marketplace where Expat rates have increased a lot.

The Solution:

Being a whole-of-market Broker, we have the knowledge to know that some lenders have no overall portfolio limits and do not restrict ownership, loan to value or overall rental stress. We also are aware that there are lenders that will consider Limited Companies without taking shareholders into consideration, if they are not a Director. We therefore sourced the deal based on the UK applicant to see if we could bypass the Expat deals and secure a normal Limited Company buy to let deal exclusively for UK based clients.

The lender we found did exactly as we thought. They would only need the Director of the company to apply, disregarding any Shareholders in the background. This in turn gave us access to a far better deal than we would have been able to achieve if both shareholders were required on the application.

Discover our Expat Mortgage Broker services.

Summary:

It is possible to achieve something with lots of challenges and moving parts. It’s just about knowing the lenders and having experience with their criteria.

Key things to consider for portfolio landlord remortgage of properties with a UK Director/shareholder, and an Expat shareholder.

  • Some lenders have no restrictive limits on your existing portfolio
  • Some lenders are happy to lend to the director of the company only, and discount the shareholder
  • It is possible to get standard limited company buy to let rates for a complicated structure that involves an expat

Please get in touch today with our dedicated team of Specialist Mortgage Advisers for any Remortgage or Mortgage questions you might have. Call us now on 03303 112 646. Alternatively, you can also fill in this short online form and we will get back to you straight away.

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Joint Borrower Sole Occupier Mortgage – Case Study

The Clients:

In this instance, our clients were a Mother and Daughter who wished to make a joint application. The Mother had recently sold her property and was looking to purchase a new property which would become her main residence.  The Daughter lived with her partner quite a distance away from her Mother, therefore the plan was for the Mother to find a new residential closer to the Daughter’s family home.

The Scenario:

A suitable property was found close to where the Daughter resides with her partner.  However, the proceeds of the sale of the house were not sufficient to purchase the property outright.  The property that Mother and Daughter wished to purchase required a mortgage of £90,000 to complete the purchase, but this proved difficult to obtain due to Mother’s age and affordability. 

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The Solution:

A Joint Borrower Sole Proprietor Mortgage was recommended – this allowed the Daughter to continue living with her partner and the Mother to move into the property.  Both Mother & Daughter are responsible for the mortgage payments, and both named on the mortgage.  However, Mother would be the sole proprietor.

The Lender was happy to go to the maximum age of 99 years based on mother’s age.  The lender viewed Daughter’s bank statements which confirmed Daughter did not contribute to the running of her partner’s home and affordability of the mortgage was confirmed by the Lender.

To protect the Daughter’s interest in the property, the Daughter had taken independent legal advice.

The mortgage completed without any issues and delighted to say the Mother is very happy in her new home and close to her Daughter.

Summary:

Securing finance in later life can be challenging as lenders will normally only lend up to retirement age, therefore making monthly repayment amounts unrealistic and unaffordable. As a whole of market Mortgage Broker, we can explore all avenues to find the best solution for our customers that work with their plans and budget.

If you have any questions relating to Residential mortgages &/or non-standard scenarios such as this, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Mixed Use Remortgage – Case Study

The Client:

The client was a retired Doctor who owned an unusual property which had a combination of Commercial, Residential and also Buy to Let units within the same building. He also owned another Buy to Let property in his portfolio. The client’s Income was predominantly from his pensions and also from land and property owned.

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Scenario:

The client wished to extend the subject property to allow for further use of the commercial element, thus significantly enhancing his rental income. He wished to refinance all current loans and raise capital toward the planned extension works. However, due to the multiple types of property contained in the single title his current lenders and high street lending options were not available to him.

The Solution:

We sought out a specialist Commercial Lender who was able to accommodate the multiple different uses within the single freehold title, whilst also still ensuring the interest rate was remained as competitive as possible.

We discussed in detail with the Lender upfront regarding their specific criteria particularly towards the minimum and maximum size of each unit within the overall freehold and also confirmed this with the client prior to our application to avoid any potential pitfalls.

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Summary:

Mixed use properties require specialist Lenders, since High Street Lenders do not lend on this type of property, nor do a number of Commercial Lenders, especially when criteria such as single freeholds, capital raising and building works all apply. In instances such as these, an experienced and knowledgeable Commercial Finance Broker have all the required expertise to be able to secure the best deal and rates available, as well as crucially ensuring a successful completion to the refinance.

Contact us today to speak with one of our professionally qualified Commercial Finance Brokers. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Portfolio Landlord BTL Remortgage with Short Lease – Case Study

The Client:

The clients are both portfolio landlords. The husband owns 14 Buy to Lets and the wife owns 12. They both have good credit and earnings. They also own their own residential property.

The Scenario:

The wife owns a Buy to Let flat in her name only, but they wish to add the husband onto the mortgage, so it is jointly owned between them both. They are looking to release some capital as part of the process to pay to extend the lease, which is currently far too short. They are also looking to purchase the freehold of the property.

The block is two flats in a converted terraced house. There are multiple things to consider here. The first is the number of properties they already own, as some lenders have limits on how many properties people can own, as well as the overall loan to value and stress coverage over the portfolio.

The second thing to consider is the lease. Once a lease is too short, the value and re-saleability of the property decreases drastically. Another point to consider is we need a lender that will accept adding the husband on to the mortgage as part of the transaction. The final things that we need to worry about is the exposure in the block (50% ownership) and the purchasing of the freehold, as most lenders do not allow the freehold to be owned in the same name as the leasehold ownership in the same block.

The Solution:

Being a whole-of-market Broker, we have the knowledge to understand that some lenders have no overall portfolio limits and do not restrict ownership, loan to value or overall rental stress. We also work with lenders that are happy to allow submission and underwriting of an application of a property with a very short lease, if it can be added as a condition of the offer that the lease will be extended on completion with the money raised as intended.

Most lenders are fine with a transfer of equity to add someone to a mortgage as part of the transaction, and this is largely dealt with by the solicitors. Different lenders have different criteria for percentage of ownership in any given block. Some are 25%, some are 33% and some are 50%.  In this case we had to get a Lender that was ok with half ownership within a single block.

The final aspect here is the freehold. This can be tricky as lenders do not generally like a leasehold on a flat to be owned under the name of the same legal entity as the freehold. The way around this was to inform the clients that they would have to purchase the freehold into a limited company name, so there was enough legal separation between the two.

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Summary:

It is possible to achieve something with lots of challenges and moving parts. It’s just about knowing the lenders and having good experience with their set criteria.

Key things to consider for portfolio landlord remortgage of flat with very short lease, transfer of equity and raising money to purchase the freehold of subject property Debt to income ratio

  • Some lenders have no restrictive limits on your existing portfolio.
  • Some lenders are happy to lend with short leases so long as it’s a condition of the offer to extend it.
  • Most lenders have no issues with transfer of equity transactions.
  • Some lenders are able to lend on 50% of a block.
  • Some lenders will allow you to own the freehold and leasehold in the same block, as long as they are owned by separate legal entities.

If you are seeking some free advice and guidance regarding how you could remortgage your Buy to Let property &/or Residential property and potentially also release some capital at the same time, then contact us today to speak directly with one of our CeMAP certified Mortgage Advisors. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Residential Remortgage for Divorce – Case Study

The Client: 

Our client was re-mortgaging their marital home as part of divorce proceedings.  During the divorce, they were renting in private accommodation and then once completion of the remortgage had taken place, the subject property would become the client’s main residence and his ex-wife would move out. 

The client was unable to wait for the divorce to be finalised as they required the mortgage offer in place as requested by the courts.  The ex-wife was unable to afford to keep the marital home and the client didn’t want to lose the property.  The client was self-employed and the income evidenced for the last 12 months was failing affordability with many lenders.

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The Scenario:

Upon assessing the application, we identified that part of the land had some commercial elements, therefore we were limited on lenders that we could approach on residential mortgage terms.  Due to the constraints of the divorce proceedings, the client was unable to wait for the title to be amended and split correctly, separating the commercial and residential elements to the property. It became evident the client required a lender that would work on projected figures.

The Solution:

A first mortgage was raised for the client.  The lender we recommended for the client was happy to assess the application taking the clients’ current circumstances into consideration and the lender was happy to assess the remortgage on their residential terms.  This then allowed the client sufficient time to remortgage on better terms later and to split the title once the divorce settlement and first charge mortgage had been finalised. 

The mortgage lender was also happy to use clients projected income figures. The client completed an Accountants Certificate with an explanation from the accountant as to why the income had increased.  The selected lender was happy to proceed, and the client was able to keep their marital home.

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Summary:

Divorce proceedings are naturally usually very challenging and stressful for all parties involved and even more so when a marital home is involved. However, working a Mortgage Broker who has experience in being dealing with these complex and sensitive matters removes a significant amount of stress and enables specialist lenders to be sourced who understand the issues.

If you’re going through a divorce and are seeking some free advice and guidance regarding how the marital home could be potentially remortgaged &/or other properties being purchased with the divorce proceeds, then contact us today to speak directly with one of our CeMAP certified Mortgage Advisors. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Contractor Purchase – Case study

The Client:

The client had worked on multiple contracts, which causes complications on the underwriting side and narrows the number of lenders to approach.  They were looking to purchase a residential property and had good credit.

The Scenario:

There are lenders who will say that they will accept multiple contracts however when the underwriter’s review, they will not feel comfortable for the client to work 50-60 hours a week” even if the position is not physical at all. These lenders have double standards and discriminate against contractor applicants. They would take the overtime income of employed applicants working a 48 hour contract and doing an extra 12 hours overtime – these have been clear practice especially in the healthcare sector.

At this point we would go to lenders who use a bit of common sense and can take up to 3 sources of income – the contractor day rate multiples are on the more conservative side (day rate x 5 x 41 opposed to the 46 multiple) however the income multiples will still be favouring the clients.

Our client’s original application took a halt after the lender exceeding the widely advertised 10 working days SLA and reached a halt 8 weeks in the underwriting the lender saying they will only use the main contract due to not seeing how it would be feasible to work 40 hours on a main contract and being 20 hours on retainer.

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The Solution:

With great disappointment after hours of manpower poured in the application we had looked elsewhere – we approached a lender who were happy to take both contracts into account and said they would consider up to 3 if need be.

Summary:

Contractor applications can be complex. And not all lenders can consider them favourably. The current view of contractors is divided. Most of the high street lenders would consider them as self-employed unless they fall under IR35. Some will use the day rate if the income is over £75,000, then we have the lenders who will use a multiple of the day rate.

With our contracting clients it is important we find the best way to increase their affordability, and, in most cases, this would be using a multiple of the day rate.

If you’re a Contractor with Mortgage questions or would like some free advice, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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First Time Landlord purchase with Gifted Equity from family member – Case Study

The Client:

The client is a homeowner. She and her son share this property and he pays the mortgage, but her name is equal part to it. She works part time and is on a modest income of £11,000 annually. She also has debt that far exceeds her income, she has 2 loans that total quite a bit over double the income. One of these loans is also paid by her son but is solely in her name. Despite the amount of credit, she has no adverse and a good score.

The Scenario:

The client was looking to purchase a Buy to Let property from her sister. She needs a lender that will accept her despite low income, and high debt. I had to make the client aware of the fact that despite the residential mortgage and one of the loans being paid for by the son, it remains her commitment. If the son stopped paying the mortgage and loan, she would remain liable for the payments, so they must be taken into account as her debt. The client also has no physical deposit. As she is buying the property in an inter family sale, her sister is willing to gift the equity as the full deposit, so we need a lender that is happy with those things.

The Solution:

Being a whole-of-market Mortgage Broker, we have the knowledge to know that some lenders will have a kinder approach to debt to income percentages. We had to make sure we could find a lender that had no specific criteria on this, and as long as the client could fit their requirements for adverse, it would pass their internal score and decision in principle. We also needed a lender that was ok with the client being a first time landlord, with no minimum income requirements, of which there are plenty to choose from. As we deal with so many weird and wonderful scenarios, we are well versed as a company at finding solutions, and we found a High Street lender that was happy with an inter family purchase with the vendor gifting the entire deposit via equity, this is something not all enders are happy with.

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Summary:

When purchasing a Buy to Let property, income amount isn’t overly important unless you have a much higher debt to income ratio. Options become limited when this is the case. You also need to realise that it becomes limited when buying from a family member and have no physical deposit with the equity being gifted as the deposit.

Key things to consider for a first time landlord purchase from family member with equity gifted as deposit:

  • Debt to income ratio
  • When you share debt, but the other person pays, it is still your debt
  • Inter family sale with equity gifted as deposit

Contact us today to speak with one of our CeMAP certified Mortgage Advisors regarding your Buy to Let Mortgage enquiries. Call us today on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.

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Mortgage Porting with Additional Borrowing – Case Study

The Client:

The clients were a young couple with a child who owned their residential home.  The first applicant was in fulltime employment, and the second applicant was employed part time – taking care of the children.  They had recently remortgaged their property onto a five-year fixed rate deal. 

Scenario:

A property became available as part of the partners fathers deceased estate, there was an Equity loan attached to it along with other charges.

There were 2 parties to the inheritance.

To prevent any early repayment charge with their existing mortgage lender the transfer of the current mortgage and topping up the loan with more borrowing was deemed to be the most cost-effective solution also using the inheritance part of the loan as a discount toward the purchase price.

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The Solution:

The lender had some unusual and limiting criteria regarding the use of equity, so we had to structure the loan in such a way as to meet the client’s needs, the lenders criteria and also ensure that the other beneficiary of the estate received their inheritance.

We were able to raise the additional funds needed to ensure the extensive renovation works could commence immediately on grant of planning for the extension works.

With the additional borrowing and the transfer of the current loan, their payments were well withing budget despite the new property being considerably larger and with room and land for their family to grow.

Had we tried the remortgage or development finance options for the costs and penalties would have been prohibitive and not allow them to buy this property which will once complete be the home they live in for many years.

Contact us today to speak with one of our CeMAP certified Mortgage Advisors on 03303 112 646. Alternatively, please complete this short online form and one of our Advisors will call you right back.