Refinance of HMO with adverse credit history

Deal Structure

65% Loan To Value

Interest Rate 9.90% per

2.5% Arrangement Fee

Interest Only 15 years

Deal Summary

Our client had tried but struggled to refinance an HMO property they had bought using a bridging loan and as the loan was fast approaching the expiry date, time was of the essence.

Due to a messy divorce they had been left with some debts and as a result of missed payments their credit history was poor.

Added to their poor credit history, they had recently been made unemployed with their only other source of income being the HMO property and a couple of other investment properties.

We were able to approach a sympathetic lender who could understand the adverse credit history and the fact that her reduced income would support all their financial requirements going forward.

We were able to achieve a loan on an Interest Only basis which enabled them to repay the bridging lender with some left over to repay some expensive credit card debts.

Although they are on relatively high interest rates now, the money they save by repaying the bridging loan and credit cards means they are in a better position over-all and we can then look to refinance with a more mainstream / cheaper lender in the future.