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The client, a fulltime property developer and landlord, approached us for help in purchasing a two-bed terrace house in need of complete refurbishment before it could be let out.

The Application Process

As the vendor required a quick sale and the property was in a poor state it could not be purchased with a buy to let mortgage, so it was clear that a bridging loan was initially required.

We approached a lender which offered to provide a bridging loan first, then without the need for an additional application, would allow the client to remortgage onto a buy to let mortgage product (subject to a simple re-inspection) once the property was ready to let.

Crucially, the lender agreed to allow the refinance to take place within six months of purchase – not many lenders will allow this type of transaction.

See the finance details below: 

Bridging Loan

Purchase price: £200,000

Loan amount: £150,000

LTV: 75%

Rate: 1.04% pcm interest only

Term: 2 months

Lender arrangement fee: 2% (£3,000)


Buy To Let Mortgage

Property value post works (Gross Development Value): £235,000

Loan amount: £175,000

LTV: 75%

Rate: 4.68% 2 year fixed rate

Term: 25 years interest only

Lender arrangement fee: 2% (£3,500)

Mortgage payment: £585

Rental income: £950 pcm

Gross yield: 4.85% pa

Have a similar case? 

If you have a similar case you would like to discuss, get in touch, and one of our expert mortgage brokers will be happy to advise. 

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