I recently worked on a high loan to value mortgage for a property developer with adverse credit. When he came to us he had a portfolio of three North London properties, worth around £2m in total, which he let out as HMOs (House in Multiple Occupation). He was looking to raise as much money as possible on one of his existing properties in order to fund some refurbishments and general maintenance, as well as a further purchase.
Although the case seems straightforward enough, there were a couple of knotty points to negotiate. The first challenge for me as a broker was that he was after a very high loan to value mortgage – around 85% – with the norm for buy-to-lets being 75%. Another potential problem was that he had an adverse credit rating. This was thanks to a run-in a few years ago with a mobile phone company, but of course it meant that some lenders wouldn’t give him the time of day.
I therefore had to find a lender willing to take a measured view of his personal situation and consider a high loan to value mortgage for him. The fact that he was renting out his properties as HMOs rather than buy-to-lets meant that I was hopeful we would be able to push the loan to value up to 85%.
After a lot of looking and in spite of unfavourable circumstances, a lender was found and I successfully negotiated an 85% loan to value mortgage for him at 5.29% to fund the expansion and maintenance of his property portfolio. Most importantly, the terms included no early repayment charges, which was an excellent result for my client.