Loan type: Buy-to-Let Mortgage | Amount: £240,000 | LTV: 75% | Term: 20 years
The Client:
The client was an experienced landlord who owned a portfolio of buy-to-let properties and also ran a restaurant in the Blackpool area.
The Situation:
Looking to expand their portfolio, the client was planning to purchase a Multi-Unit Freehold Block (MUFB), which contained 12 units, including 8 studio flats and 4 1 bed flats. The studio flats were between 18-20sqms which is smaller than the 30sqm requirement that many lenders have in place. Within the MUFB there was a mixture of tenanted and vacant units.
A percentage of the deposit was gifted from a family member, following the sale of an overseas property.
Our Solution:
At Aria Finance, we underwrite all our cases in house before placing them with a lender, this allows us to flag any potential problems and deliver a more seamless process for both the client and lender. With this case there were two factors that could be issues, the size of some of the units and the funds within the deposit from an overseas source. We knew that many lenders would not have an appetite for a case like this and we would require a lender with a common-sense approach. Our long-held relationships with a variety of lenders meant it was quick and easy for us to approach a suitable lender with this case.
The lender was able to get comfortable with this purchase, they looked at the current income yield on units with leases which were generating at 289% ICR. Also following their standard financial risk check they were confident to proceed with the funds that were from an overseas source.
Benefits & Results:
The key to the success of this deal is the way in which the team here at Aria Finance package all our cases. By underwriting a deal ourselves in house, we pinpoint areas of a case that may be questioned further down the line. We can then liaise with the client to extract the answers, that the client may not have voluntarily shared with us in the first instance, ensuring we overcome any issues before the client goes too far down the line.
With this case, because we had already gone through our internal underwriting process and sourced the additional supporting documentation, the lender was able to quickly make the investigations needed and issue terms to the clients.
