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Property developer refinances two newly built flats - October 2013

Case Study Synopsis
We have been approached by a property developer who has just completed the construction of a block of eight flats in a university town, financed with a development loan of £857,000.

He already owns a large portfolio comprising a mixture of residential and commercial use properties and land, partly in his own name and partly through the property development business.

He is now looking to raise finance through the business against two of the new build flats to keep as a long term investment, using the funds to repay part of the development loan. The remainder of the development loan will be settled using the sale proceeds of the other units. The flats he has chosen to retain have been valued at £325,000 and £375,000 and are expected to be let at £1,250 and £1,450 pcm respectively.

Keystone Buy to Let Mortgages proved to be the perfect solution for a number of reasons:

•  It accepts applications on new build properties
•  It lends to businesses
•  It does not impose a limit on the size of the borrower’s portfolio
Property 1 value £325,000
Property 1 loan £218,000
Property 1 LTV 67%
Property 2 value £375,000
Property 2 loan £253,000
Property 2 LTV 67%
Product Standard buy to let mortgage for limited companies
Rate 3 year discounted rate 5.28%
Term 20 years interest only
Lender arrangement fee 2.75%
Warning: Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage.