Page 10 - The Pulse Issue 4

Couple set up SPV Ltd Co to purchase low value, Remortgage of unlicensed HMO within six months of purchase
high yielding 3-bed semi on Merseyside

A married couple, both full-time landlords were looking to raise finance
We were approached by a broker whose clients, a married couple, were against one of their recently refurbished rental properties.
looking for help in getting a buy to let mortgage to buy a 3-bed semi on
the Wirral which is already tenanted and generating £600 pcm. The The couple had purchased a four-bed house via short term finance and
couple both work full-time in the healthcare industry and also personally converted it into a six-bed HMO.
own a small portfolio of rental properties.
Completing the transformation within six months, the couple now wanted
On the advice of their accountant they had set up a Special Purpose to refinance the property onto a buy to let mortgage, whilst also raising
Vehicle (SPV) limited company through which to make further buy to let enough finance to repay the short-term loan.
purchases because it will be more tax efficient for them going forward.
For most lenders refinancing within six months of purchase is a no go. This particular property type also narrows
Keystone proved to be a suitable solution because the loan was less than £75k which many lenders will not down the amount of lenders willing to assist.
consider. The minimum loan threshold in the Classic Range is £50k. Keystone also accepts SPVs as standard.
The couple chose a competitive five year fixed rate to protect them from any near-future rate rises. Fortunately Keystone was willing to look at the case and offered the following terms.

Property value: £96,000 Term: 5 years interest only Property value: £185,000 Term: 20 years interest only PROC FEE: 0.6%:
Loan amount: £72,000 Lender arrangement fee: 2% (£1,400) PROC FEE: 0.6%: Loan amount: £138,750 Lender arrangement fee: 2% (£2,775)
LTV: 75% Mortgage payment: £240 pcm LTV: 75% Mortgage payment: £496 pcm
Product range: Classic Range Rental income: £600 pcm Product range: Classic Range Rental income: £2,458 pcm £832
Rate: 3.99% 5 year fixed Gross yield: 7.5% £432 Rate: 4.29% 3 year fixed Gross yield: 15.9%

Short term finance for inexperienced developer to purchase and
Landlord with missed mortgage payments refinances to refurbish refurbish 3-bed house
buy to let

We were approached by a broker with a client - an engineer who was
An engineer contacted his broker looking to raise capital against his only looking for short term finance to purchase a 3-bed house in a popular
rental property – a 1970s 4-bed house in Greater London. He wanted to seaside town on the south coast. The property was in need of a complete
refinance the property to carry out necessary refurbishment works on it. overhaul before it could be let, so would not qualify for a buy to let
mortgage from the outset.

Complicating the process was the client’s poor credit history, including The client already owns two other buy to let properties but this was his
missed mortgage payments within the last two years and late payments first foray into refurbishment so we needed to use a lender that didn’t
on personal loans and utility bills. The broker knew this meant that the require this sort of experience. Following advice from his tax adviser, the
client would be unable to obtain a loan from a mainstream buy to let client had set up a Special Purpose Vehicle limited company through which to make the acquisition.
lender, so he took the deal to Keystone.
The broker brought the case to Keystone because it has a range of short term products he felt might suit the client.
The Solutions Range is designed to help landlords looking for finance and help in repairing their credit profile. Its lending policy does not necessarily require borrowers to have refurbishment experience and because the
Satisfied with the client’s ability to afford the loan based on his strong salary, the following terms were offered: client’s income from salary and rent would more than support the works being carried out by contractors, it was
happy to offer terms.
Property value: £635,00 Term: 12 years interest only
Loan amount: £400,000 Lender arrangement fee: 3% (£12,000) Purchase price: £190,000 Term: 18 months (max) interest only
LTV: 63% Mortgage payment: £2,371 pcm PROC FEE: 1%: Loan amount: £135,000 Lender arrangement fee: 2% (£2,700)
Product range: Keystone Solutions Range Rental income: £2,300 pcm Post works value: £275k (estimate) Loan payment: £1,049 pcm PROC FEE: 0.5%:
Rate: 6.89% Gross yield: 4.35% £4,000 LTV: 71% Rental income: £1,300 pcm (estimate)
Rate: 6.89% £675
Product Range: Short Term Finance Range

Broker Hotline 0345 148 9086 Broker Hotline 0345 148 9086

Visit keystonepropertyfinance.co.uk Visit keystonepropertyfinance.co.uk

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