Loan value: £812,000 | Rate: 3.90% above Libor, over five years, 1.5% lender fee plus 1% broker fee | LTV: 73.96%
The Situation:
Sometimes a deal can make perfect commercial sense but, something seemingly insignificant makes it fall outside a lender's criteria and the whole thing collapse.
Worse, this can often at the last minute when the details are being checked and the borrower is left in the lunch.
Brokers know that this is where they earn their stripes - finding solutions when clients are most in need is the reason most brokers are in business.
Aria Finance was recently referred to as just such a case: not only was it a purchase of four flats in a block, but the purchase was also through a limited company and the properties had both a tenancy and sub-lease agreed for two years.
To complicate matters further, the company's directors had no previous experience of buy-to-let - on paper making them a first-time landlord.
The introducing broker had taken their client 90% of the way down the line with one of the high-street lenders but at the last minute, just weeks before completion was due, the deal had been declined due to the complexity of the tenancy agreements in place.
Our Solution:
Lucy Barrett, Managing Director of Aria Finance, said: "This is a really good example of when specialist advisers can work with brokers to help them get a deal over the line.
We took the time to look at the case in detail - the four directors of the company might not have been landlords before but they each earned £60,000 a year through property development."
The tenancy agreement in place was with an estate agent for two years - guaranteeing rental income - and they'd agreed on a two-year sub-let with the local authority to lease the properties to emergency tenants who weren't classed as vulnerable.
Result:
This was the thing that put off the big lender but at Aria Finance, because we do deals like this day in, day out, when we put the deal to one of our panel of specialist lenders they trust us to present the nuances of a case.
They know we are going to give them commercially sound opportunities.
As a result, the clients made their completion date and the lender agreed to lend despite them usually insisting on buy-to-let borrowers having landlord experience.
