A married couple approached their broker looking to remortgage a self-built, 4-bed house in Hampshire.
The couple had established a trading property development company in the early 2000s and had since been house-building and developing property to sell on.
After speaking with their accountant, the couple had decided to alter their business strategy and rent out one of their most recently developed homes.
Although the house was unencumbered, the couple wanted to refinance it on to a buy to let mortgage to raise capital for future investments.
The broker approached a BDM at Keystone, as he needed a lender which would accept:
The BDM explained the situation to Keystone’s underwriters who took the view that the couple, their business and the property in question were a good risk.
The following terms were offered:
Property value: £750,000
Loan amount: £400,000
Rate: 3.99% 5 year fixed
Term: 20 years interest only
RTI calculation: 125% @ 3.99%
Product: Classic Range
Borrower: Trading Ltd Co
Lender arrangement fee: 2% (£8,000)
Mortgage payment: £1,330 pcm
Rental income: £2,000 pcm
Gross yield: 6% pa
Broker proc fee: 0.6% (£2,400)