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Couple in their 70s receive 25 year term on ex-LA flat

Couple in their 70s receive 25 year term on ex-LA flat

We were approached by a broker whose clients were a married couple looking to re-configure their property portfolio on the advice of their accountant.

The couple, who currently own 50 rental properties had been advised to begin selling their low-performing properties and transfer ownership of their remaining ones to that of an SPV Ltd Co.

In reality this type of transaction is not a straight ‘transfer’ – the couple must in fact sell their properties to their SPV limited company at open market value.

The first property the couple had decided to sell to their SPV is a two-bed ex-council flat within a small block in Manchester.

Several factors meant the finance required would need to come from a specialist lender.

  1. The applicants are both retired and rely on rental income as their main source of income

  2. The couple were looking for a 25 year term, which would take them both into their late 90s

  3. The property is ex-local authority

  4. This transaction would be classed as an associated transaction

The broker approached Keystone Property Finance – as they doesn’t impose any age restrictions on those borrowing via a limited company. Deeming the couple a good risk, the following terms were offered:

Property value: £115,000

Loan amount: £86,250

LTV: 75%

Rate: 3.89% 5 year fixed

Product: Classic Range

RTI: 125% @ 3.89% 

Term: 25 years interest only

Borrower: SPV Ltd Co

Lender arrangement fee: 2% (£518)

Mortgage payment: £279 pcm

Rental income: £575 pcm

Gross yield: 6% pa

Proc fee: 0.6% (£517)


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