Client circumstances:
We were recently approached by a broker whose clients were buying their dream home. Contracts had been exchanged but they were part of a chain of six properties. Their buyer’s buyer had faced issues that were causing delays in their purchase, directly affecting our clients’ buyer. As a result, our clients’ ability to purchase their property was at risk.
MT Finance solution:
The clients were partly funding their purchase via a company loan which was being provided by one of the borrower’s businesses. To ensure our due diligence, we conducted AML checks and submitted a deed of subordination to safeguard our charge. With everything in order, we issued a regulated bridging loan of £2.4m, at 70% LTV of the property’s OMV of £3.43m, with a term of 12 months.
The benefits:
By moving quickly, we provided the clients with the funds to save their purchase. They now have 12 months to repay their bridging loan by using the proceeds from the sale of their previous residence, as well as refinancing their new home onto a long-term mortgage. If this is accomplished within 12 months, they will not be charged any exit fees or ERCs.