The customers were builders who advised us they would be doing the majority of the refurbishment work themselves, including

fitting a new bathroom and kitchen, decorating, and installing new internal

and external doors.

We were contacted by a broker representing two first time landlords who wanted to purchase a three bedroom end of terrace property at auction which required light refurbishment work to bring it up to a habitable standard before it could be let out.

The scenario

The solution

The background

Case study

Refurbishment Buy to LetOldbury, West Midlands

In November 2018, we launched our Refurbishment Buy to Let proposition to help landlords maximise rental yields by refurbishing a property before letting it out.

The offering brings together the flexibility of a short-term Bridging Finance loan to carry out the refurbishment work together with the surety of an exit onto a long-term Buy to Let Mortgage once the work has been completed.

Not only does this give landlords the peace of mind they have an exit in place, they can also rest assured knowing that the price of the mortgage at offer will be the price they get on completion (providing the property meets the expected valuation following refurbishment).

After establishing that the customers had sufficient surplus income and neither of them had a large amount of unsecured

debt, we were able to offer a gross Bridging Finance loan of £90,749 at 75% LTV of the

£121,000 purchase price at auction.

As we allow borrowers to wrap up fees in their loan, the customer chose to include

the £673.17 facility fee, £25 telegraphic transfer fee and £295 administration fee in the gross amount. They opted to pay the

£550 valuation fee and £1,440 legal fees upfront.

The application was received during February and we completed on the Bridging

Finance loan in just under three weeks, during which time we carried out a full legal check and valuation of the property which

returned an expected market value after improvements of £135,000 with a rental

value of £650 per month.

The customers completed the refurbishment work within two months and the reinspection of the property returned a valuation of £135,000, as predicted in the initial pre-works estimated valuation. The customer opted to exit on to a buy to let mortgage of £101,250 at 75% LTV of the gross value.

£90,749 £121,000

£650

0.79%

3 weeks £135,000

Bridging Finance loan of

Property purchased for

Rental value of

6 month loan for

Completed the Bridging

Finance loan in

Refurbished property valued at

at 75% LTV at auction

per month

per month

0.79% £135,000TO LET

£650pm

3WEEKS

TO LET

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498). Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD. 0

25

42

(3

)

Contact your local BDM 0800 116 4385 precisemortgages.co.uk