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Stretched Leverage Bridge

Purchase of Investment Property with Stretched LTV’s

  • Loan: £235,000
  • Term: 9 months
  • Charge: 1st on purchase, 2nd on security
  • Site Value: BMV-£195,000 / OMV £285,000
  • Site: Residential
  • Exit: Sale of refurbished property

Becky who is an interior designer came to us having been presented with an opportunity to purchase an investment property at Below Market Value (BMV).

She wanted to leverage the Open Market Value (OMV) of the property and was seeking to raise 80% LTV against the (OMV) of the property to make the project viable for her.

The property also required light refurbishment work, which she also required funds for.

She offered another BTL property that she owned and was in the middle of refurbishing as additional security to achieve the extra borrowing. This property had a first charge that she didn’t want to replace, but required a small amount of extra funds to complete this project too.

Kirsty Botten our specialist property finance consultant worked with Becky to discuss a number of potential options. Key to realising the project for Becky was the speed of the transaction, having been offered a tight time frame to complete on the basis of buying below the market value for the property.

Kirsty Botten was able to get terms with a single lender who are very used to working in tight time frames, are happy to work with the Open Market Value of the property as well as offering second charge terms, the lender understood and was comfortable with some issues with Becky’s credit profile but was able to take a common sense view to offer excellent terms and able to complete the transaction in 3 weeks.

Solution

  • No broker fee
  • 0.89% pm
  • BMV: £195,000
  • OMV: £285,000
  • Additional security:  £345,000 with £184,000 First Charge Mortgage
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