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Landlord with adverse credit saves £800pcm and raises £20k

Landlord with adverse credit saves £800pcm and raises £20k

A broker approached us looking to place a deal for his client – an accountant from South London with a small portfolio of rental properties.

The client was hoping to raise capital on one of his rental properties to carry out refurb works, whilst also reducing monthly payments - currently sitting on a rate of circa 10%.

The property in question is a 1950’s 3-bed terraced house in Lambeth.

There were three main challenges with this case, which had caused the broker to struggle placing the case with a high street lender:

  1. The client had four mortgage arrears on his credit profile (all within the last two years)

  2. The rental income did not cover the mortgage repayments, which meant the case needed to be placed with a lender which would accept top slicing

  3. The client was keen for the deal to go through quickly, after being delayed by other lenders incorrectly quoting.

Keystone is able to assist landlords with up to four secured arrears as part of its Solutions Range. Keystone will also consider cases where the borrower uses their personal income to top up any shortfall in rent.

The Keystone business development manager helped the broker and his client complete the application form and compile the necessary documentation to support the loan.

Happy with the client’s credit profile, background income and the strong location of the rental property the following terms were offered, raising the client £20k and saving him just shy of £800pcm.

Property value: £635,000

Loan amount: £400,000

LTV: 63%

Rate: 6.89% variable rate

Term: 15 years interest only

RTI: 120% @ 6.89%

Product: Solutions Range

Borrower: Individual

Mortgage payment: £2,371 pcm

Original mortgage payment: £3,166 pcm

Rental income: £2,000 pcm

Lender arrangement fee: 3% (£12,000)

Gross yield: 3.8% pa

Broker proc fee: 1% (£4,000)


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