The client
Our client wanted to arrange long term finance to repay the bridging and development finance. Because this had been arranged on her split commercial/residential property purchase. We wrote about this last week purchase-of-a-commercial-premises-and-flat-without-planning-permission-followed-by-refurbishment-funding-to-convert-residential-into-two-further-flats.
The property
We needed to arrange a long-term finance package. As the bridging finance was due to be repaid after 12 months. The combined property value was £650,000 and the client required a loan of £455,000, giving a net loan-to-value of 70 per cent.
The finance
There is a requirement of a loan of around PS455,000 and a lender for residential basis lending. Many lenders were sought. However, the only one Hampshire Trust Bank was able to meet the requirements.
Key requirements: –
- A lender comfortable with a commercial property split with three residential flats above all on separate assured short hold tenancies (ASTs).
- Also, A lender comfortable with lending to a client with no previous commercial landlord experience.
- Lending on an interest-only basis.
But, we identified a lender who would agree to lend our client the full £455,000 on an interest only basis, after sourcing the mortgage market.
The application process
To support the mortgage application, the client supplied us with proof of identity and address. Also, the lender required her last two years’ annual accounts and tax calculations. A copy of the commercial lease and her last three months’ bank statements to evidence rental income.
Property value: £650,000 Loan amount: £455,000 LTV: 70% Rate: 5.05% fixed for five years Lender completion fee: £9,100 Monthly payment: £1,953.09
