refinance to fund conversion in nine working days, SW16
Client circumstances:
Our client had purchased an investment property the previous year and they were now looking to redeem the existing charge. In total they needed to raise Ā£1,260,000 to repay the current loan as well as providing additional finance to fund a conversion and help to enhance the propertyā€™s capital value. Having already approached another lender who were unable to proceed due to the client having no other buy-to-let properties, they were quickly running out of time. Keen to ensure they did not incur any financial penalties, their broker quickly got in touch with us.
MT Finance solution:
Having received the application on 21st March, our underwriting team sent the legal checklist to the borrowerā€™s solicitors on the 22nd. Funds were received the same day allowing us to instruct our solicitors. A valuation had already been completed by the first lender the client approached, even though they were unable to proceed with the loan. Due to time constraints, we were able to accept a retype of this valuation. This was received on the 23rd. Three working days later we sent the security documents and on the 31st March we issued a Ā£1,260,000 bridging loan at 70% loan-to-value of the propertyā€™s open market value of Ā£1,800,000. The term was set for nine months.
The benefits:
By taking out a bridging loan with MT Finance, our client was able to repay their existing charge without facing any charges. They now have nine months to undertake the conversion. With planning permission already submitted, the client is intending to convert part of the property into a two-bedroom self-contained unit. If planning permission is not granted, they will opt for a full renovation of the property. Both of these options will help to increase the propertyā€™s value and ensure the client maximises their investment. Once the works are complete, they will sell their asset ā€“ or assets ā€“ and use the proceeds to repay their bridging loan. If this happens in less than nine months then they wonā€™t face any early repayment charges or exit fees.
