Foreign national served Notice to Complete, N6

Published by MT Finance -

Client circumstances:

Our client required £2,730,000 to purchase a five-bedroom investment property with an open market value of £3.9m in a highly desirable area of north London. Notice to Complete had been served and a completion date set.

However, the client was a foreign national whose finances were tied up in shares in their home country and accessing these were proving to be a lengthy process. Due to the client’s nationality, there were only a limited amount of high street lenders who would issue a BTL mortgage to them. Even if they had found a traditional lender before the completion date, there were no guarantees it would have been issued in time. If the client could not secure the total balance before the Notice to Complete deadline, the seller would have had the right to terminate the contract, meaning the client could have lost their deposit of £195,000.

The client had already purchased a main residence in the UK, and it was essential that they did not miss out on this opportunity to expand their high-net-worth portfolio- or risk their deposit. This is when their broker came to MT Finance to help secure a bridging loan to quickly complete the purchase.

MT Finance solution:

We knew that the property had huge potential as a rental thanks to its prime location and it being in a very good condition, meaning tenants could move in without delay. These factors enabled us to start the process without any delays. Our underwriters and case managers worked closely with the valuer and solicitor to issue a first charge bridging loan of £2,370,000 at 70% of the property’s LTV of the OMV. Interest was applied at 0.85% over a 12-month term.

The benefits:

Our ability to quickly approve a bridging loan for the client ensured that they could complete the purchase, thus saving their deposit. As well as adding almost £4m to their portfolio, the client will receive excellent rental income. The 12-month term will give them plenty of time to refinance on to a BTL mortgage, which will enable them to exit our bridging loan. If this happens in under the 12 months, then our client will not be charged any exit fees or ERCs.