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BTL refinance for inherited property to repay deceased father’s mortgage

BTL refinance for inherited property to repay deceased father’s mortgage

We were approached by a broker looking to source finance for his client – a part-time landlord wanting to repay her recently deceased father’s mortgage.

Just over a year ago the client had lost her father and inherited his three-bed home in Nottingham. With more than £100k remaining on the mortgage the daughter was left with two options – sell the property or refinance.

Already holding a small portfolio of rental properties, the client was keen not to sell up. Instead, she planned to refinance the property onto a buy to let mortgage using the capital raised to repay the original mortgage. On the advice of her accountant, she wanted the finance in her personal name.

Waiting for the probate to be signed off, the daughter had gained interim consent to let from her father’s original lender.  With probate complete, the client’s broker was struggling to find a lender that would accept the back-story and work around the time lines required, so he asked Keystone for help.

The BDM explained the situation to our underwriters who took the view that the client was a good risk and agreed to accommodate the necessary timelines.

Here are the details of the deal:

Property value: £180,000

Loan amount: £141,000

LTV: 78%

Rate: 4.19% five-year fixed, Classic Range

Borrower: Individual application

Term: 25 years’ interest only

Interest only or capital & interest: Interest only

RTI calculation: 145% @ 4.19%

Lender arrangement fee: 2% (£2,820)

Mortgage payment:  £492 pcm

Rental income: £750 pcm

Gross yield: 5% pa

Broker proc fee: 0.6% (£846)

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