Commercial Mortgage Refinance for Expat HMO Investors

This case study shows how we helped two expat investors refinance a completed HMO development, despite a challenging payment history, allowing them to release equity and move on to their next project.

The Challenge

Our clients owned a UK limited company that had successfully purchased and converted a large property in the North East into a high-quality six-bedroom HMO.

The completed property was valued at £350,000, and the clients wanted to refinance so they could recover the funds invested in the development and reinvest them into another project in the same area.

The application presented several challenges.

Both directors of the company were expatriates, living and working in different parts of the world, making the case more complex than a standard commercial mortgage application.

In addition, although an existing loan was fully up to date, the lender could see a history of regular late payments. While there were valid reasons for these missed payment dates, many lenders would have declined the application without considering the wider circumstances.

The clients needed a lender that would:

• Consider applications from expatriate directors
• Take a pragmatic view of the previous payment history
• Refinance the completed HMO
• Release enough equity to fund their next investment project

Our Solution

Positive Commercial Finance approached specialist commercial mortgage lenders with experience of more complex applications.

Rather than focusing solely on the payment history, we prepared a detailed explanation of the circumstances behind the late payments and demonstrated that the loan was now fully up to date.

We also presented the strength of the completed development, the property’s rental potential and the clients’ future investment plans.

This gave the chosen lender the confidence to support the application and offer a Commercial Mortgage Refinance that met the clients’ objectives.

Deal Structure

• Loan to Value (LTV): 60%
• Commercial Mortgage Facility: £210,000
• Interest Rate: 5.5% over Base Rate*
• Arrangement Fee: 2%
• Term: 20 years

*Interest pricing reflected the market at the time the facility completed.

The Outcome

The clients successfully refinanced their completed HMO, releasing enough equity to recover much of their development investment and move forward with another project.

By identifying a lender willing to consider the full circumstances of the application, Positive Commercial Finance secured funding where many mainstream lenders may have declined the case.

This case study demonstrates how Commercial Mortgage Refinance can help experienced property investors overcome complex lending challenges, including expatriate ownership and non-standard credit histories, while continuing to grow their portfolios.