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Director with missed credit card payments refinances block of 6 flats

Director with missed credit card payments refinances block of 6 flats

We were approached by a broker whose clients wanted to remortgage a multi-unit block of six flats in a busy Welsh town.

The clients are three family members, all of whom are the directors of an SPV limited company which owns 10 investment properties.

They wanted to refinance the flats to pay off some credit card debts and raise capital to use as a deposit on another buy to let they were looking to purchase.

When talking through the borrowing options with his clients, the broker discovered that, a few years ago, one of the directors had missed a mortgage payment and three credit card payments.

It was because of these collective circumstances, that the broker approached Keystone with the deal…

  • Keystone accepts blocks of flats with up to eight separate units

  • Keystone offers the same rates to limited companies and personal borrowers

  • Keystone ignores missed mortgage and credit card payments if they occurred more than two years before

An application was submitted and the underwriting began. Credit searches on all the directors revealed good, recent profiles and the valuation report confirmed that the flats were suitable security for the loan.

Subsequently, Keystone issued a formal offer to lend subject to each director providing a personal guarantee.

Here are the details of the deal:

Property value: £730,000

Loan amount: £547,500

LTV: 75%

Rate: 4.19% 5 Year Fixed from the Classic Range

Term: 25 years’ interest only

RTI: 125% @ 4.19%

Borrower: SPV Limited Company

Mortgage payment: £1,911pcm

Lender arrangement fee: 2% (£10,950)

Rental income: £4,475 pcm

Gross yield: 7% pa

Broker proc fee: 0.6% (£4,380)

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