Hat-trick: Speed, flexibility and affordability delivered to get the deal over the line
A broker we have worked with on numerous projects, recently approached us on behalf of their client, who had secured a mid-terrace property in Newport, Wales at auction for and needed to receive funding almost instantly to complete the deal.
The borrower was looking for a finance option, which would keep the initial payment low, as well as enable him to carry out some minor refurbishment works to get the property on the market for rental. The client was very experienced and had an extensive property portfolio, so he knew he needed to work with a bridging lender he could rely on and could provide a solution to support his tight timeframe, aid his cashflow and fund the refurbishment works on the property.
This is a situation Hope Capital have seen many times and we have a significant amount of experience handling auction purchases. However, in this case and with the extremely tight timescales imposed by the auction purchase, we had to work even quicker to speed the process up and ensure all the necessary information was in place, so the client could complete the purchase on time. With that in mind and as finance was needed on a rapid timescale, we looked at using an AVM valuation to deliver the fastest solution. The borrower was happy with the LTV and loan amount that we could lend based on the simple AVM valuation, so we progressed with the automated valuation immediately.
After speaking to the client about his needs, it became clear the best option would be our Discounted Rate Loan, which is designed to help borrowers achieve a balance between affordability, optimal loan amount on day one, cash-flow and Loan to Value. This option is part of the Custom Collection, one of the most unique bridging finance products available in the market.
Additionally, we were also able to provide added value to our client, by recommending one of our panel solicitors, Freeths, who could act quickly and efficiently on the borrower’s behalf.
In this case, the Discounted Rate Loan offered the client an initial borrowing rate of just the first six months and then for the last month. This enabled the client to receive the extra cash needed on day one to complete the refurbishment works, which were planned to be completed by the third month. Once the refurbishment works were completed, the client was then able to rent the property out so he could easily afford the higher monthly interest payments with the rental income received via the tenant.
The borrower was able to redeem the loan in just 7 months meaning the blended interest rate was 0.69%. If the borrower did not have an option like Hope Capital’s Discounted Rate Loan, he would have ended up paying more. With this product the client saved money and had the flexibility he needed to complete the auction transaction.
Additionally, owing to the client having over 6 months ownership of the property and a tenant in place, the client was also able to refinance and secure a highly competitive rate on a buy-to-let mortgage.
Emily is responsible for developing, implementing and managing the positive image of Hope Capital, as well as communicating key messages to stakeholders within the industry.
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