70% Loan to Value on Day 1
Then 100 % of total works costs
60% Loan to GDV
Interest Rate 0.76% per month, with interest retained
1% Arrangement Fee
No exit fee
12 months term.
Our clients had agreed to purchase a residential property in need to quite an extensive refurbishment. Given the extent of works required, a fixed price contract was agreed with a local builder.
The clients borrowed 98% of the purchase price of the property with a Bridging Loan, using the equity from another property they owned. The lender took a first charge over the property being purchased, and a second charge over their existing property, to enable such high leverage. It was also agreed that 100% of the build costs would be funded in arrears, in 2 tranches.
The clients purchased the property using an SPV, as the first of hopefully many projects. One is an experienced landlord, but the other was a first-timer. Given their experience was limited, a fixed price contract had to be put in place, for the works.
The clients expect to sell the property after works are completed, and will use the profit to go towards the next project.