Gross Loan Amount:
£675,000
Property Value:
£980,000
LTV:
70%
Initial Circumstance
We’re always over the moon when a broker returns, and we’re happy to announce that we have many long-standing relationships with brokers and clients alike. So, when one of our regular brokers introduced us to some new clients, we couldn’t wait to get started.
The clients were established landlords with a large estate in London, and they had gathered a large amount of equity in the property. They had been renting the asset as a standard buy-to-let but were looking to increase their revenue by converting it into an HMO.
With 6 bedrooms, the property would be classed as a large HMO and would entail a fair amount of work to ensure that it was in keeping with HMO licence guidelines; set by both government and the area council.
MFS Solution
They decided to pay off the remaining mortgage with additional funding from the loan, which allowed them to clear the outstanding debt.
Due to the number of tenants they were looking to lend to, being a large HMO, there was plenty of work that needed to be done. We were provided with a quote from a builder that included the implementation of the additional kitchen, bathroom and all other appliances that were necessary to be compliant with HMO guidelines, fire alarms, fire doors, license and correct sized rooms.
This built confidence on our side that all the works would be completed, and the rooms would be available to rent out in 12 months. Then they would be able to apply for a traditional mortgage with a mainstream lender to exit from our bridging loan.
The Benefits
We often deal with BTL and HMOs and therefore understand the regulations and protocols that need to be met. This allows us to steadily support the brokers and their clients, taking each step alongside them.
We allowed the HMO owner the time and funds needed to complete the light development on the property.
