A Limited Company landlord with income from one buy to let property in Central London wanted to refinance to a more competitive mortgage rate. Despite challenges due to his sole income source, we found a suitable lender and facilitated a successful remortgage.
At a glance:
- A Limited Company landlord with one buy to let
- An apartment in Central London that our client had owned for 17 years
- With sole income from the property, many lenders were wary of the stability of the application
The Case:
Our existing MFB client returned to us looking to refinance his one buy to let property. At the point of his initial enquiry, our client was paying his lender’s Standard Variable Rate, so he wanted to secure a more competitive Limited Company fixed-rate product to bring down his mortgage costs.
The buy to let property in question was an apartment in central London, which had maintained significant tenant demand over the 17 years that our client had owned it.
The Challenge:
The primary challenge with this case was our client’s income. While they intermittently worked restoring old sports cars, their only regular income was from the rent on the apartment. Because it was so sporadic, we knew lenders would not consider the income from the car restoration business in their due diligence checks.
While many lenders have no minimum income requirements, most like to see some form of regular, steady income as this provides reassurance against any unforeseen circumstances or economic market volatility. Some lenders accept rental income; however, others consider this high risk in case the property becomes vacant or the tenant stops paying. As our client’s only regular income came from this one buy to let property, we needed a lender to accept this as the sole income source.
Our knowledge of the lenders in the buy to let market space meant we were able to identify the top choices to approach with this application quickly. We discussed the details of this case with the underwriters and BDMs prior to submitting an application, looking to save our client time and money. With a full understanding of our client’s background and situation, the lender was able to proceed, and we managed to secure our client the finance in just under 3 months.
The Finance:
Property value: £1,000,000
Loan amount: £275,000
LTV: 28%
Rate: 5.51% 5-year fixed*
Term: 20 years, capital and interest
Monthly mortgage payment: £1,893
Lender arrangement fee: £2,495
*Rate as at June 2024
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