An experienced portfolio landlord needed to remortgage six retail units after their lender stopped lending. Find out how we navigated challenges with rental agreements and Companies House records, securing a successful remortgage deal.
At a glance:
- An independent financial advisor (IFA) needed MFB’s access to specialist lenders to secure a complex remortgage for their commercial investor client
- A purpose-built block consisting of retail units and residential properties
- Our client’s existing lender stopped lending, forcing all their clients to remortgage
The Case:
Our client was introduced to us by a financial advisor we had previously placed deals for. As an established portfolio landlord, the client had experience with a range of different property investment types, such as the complex commercial unit they were looking to remortgage.
The properties in question were six individual, self-contained retail units within a purpose-built block comprising of commercial and residential apartments. The client’s existing mortgage on these units was with a subsidiary of an Asian bank in the UK, which had stopped lending and effectively forced all their clients to remortgage.
Our experience and expertise within the complex commercial market meant our introducer was confident we could help find their client the best remortgage deal possible given the unique circumstances.
The Challenge:
Several challenges arose with this case. The varying types of businesses within the retail units, each on a different lease with a different informal rent agreement, made it hard to place.
Furthermore, to maximise the client’s borrowing capacity, we needed to base the loan amount on the total rental income across the units. Some lenders discount rent tenant leases with less than two years left or those on a 12-month rolling agreement. Consequently, we needed a specialist commercial lender to place the deal with, restricting our choice.
However, the biggest challenge was an issue with the client’s Companies House records. The existing lender had pulled one of their lending facilities as a policy decision, and the client could not remortgage within the tight timescales. This resulted in their Limited Company being liquidated.
In these types of cases, the introducer’s established relationship with the client is invaluable in helping us gain the client’s trust. We worked closely with the client and the introducer to provide a full background narrative and reassure the lender of potential issues.
We quickly resolved the questions surrounding our client’s Companies House records and confirmed the rents on each retail unit to ensure our lender felt comfortable lending the maximum amount on the property.
The introducing IFA has since referred several other clients’ mortgage cases to MFB. The client always remains the introducers, but benefits from our expertise and solutions – so everyone wins!
The Finance:
Property value: £2,165,000
Loan amount: £1,329,000
LTV: 61%
Rate: 6.99% 5-year fixed*
Term: 10 years, capital and interest
Monthly mortgage payment: £10,252
Introducer fee: £6,994
Lender arrangement fee: 1.75% (£23,257)
*Rates as at August 2024
Next steps
If you have a similar case you would like to discuss, get in touch with one of our team.
