The client: Our client wanted to arrange finance to repay the bridging and development finance which had been arranged on her split commercial/residential property purchase which we wrote about 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: Now that the development of three flats above and to the rear of the commercial premises had been completed, 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: The client required an interest-only loan of £455,000 and a lender who was prepared to lend on a split commercial/residential basis. Numerous lenders were sourced but only Hampshire Trust Bank was able to fulfil the brief.
Key requirements: –
A lender comfortable with a commercial property split with three residential flats above all on separate assured shorthold tenancies (ASTs).
A lender comfortable with lending to a client with no previous commercial landlord experience.
Lending on an interest-only basis.
After sourcing the mortgage market, we identified a lender who would agree to lend our client the full £455,000 on an interest-only basis.
The application process: To support the mortgage application, the client supplied us with proof of identity and address. The lender also 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. We were delighted to inform our client that the lender had issued a formal mortgage offer for the full amount requested.
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
