Rescuing a buy-to-let mortgage complication

A customer approached us after her buy-to-let mortgage on a Central London flat suddenly fell through because of a mistake.

The customer had already paid a large deposit of £160,000, which she was in danger of losing if she did not complete the purchase within a week, so an extremely quick funding solution was her only option.

This is where we came in.

How We Helped to Rescue the Transaction

We immediately established that the customer’s desired loan-to-value ratio was past the threshold of our standard criteria, so we were willing to proceed on the condition that we could implement a second charge on another London property she already owned (which would lower the ratio and allow us to provide all of the required funds).

The customer agreed to this second charge, so we then just needed to ensure that she had a realistic exit strategy in place, in order to avoid any further complications. She planned to remortgage following our six-month loan term, which we quickly assessed and accepted as a viable exit.

Acting Quickly to Organise the Bridging Loan

We instructed urgent valuations on both properties (the one the customer wanted to buy and the one she already owned), our on-site legal team swiftly organised all of the necessary legal documentation, and then we contacted the customer’s first-charge lender to secure their consent for our proposed second charge. The retained-interest aspect of the loan meant that we did not have to carry out a full affordability assessment on the customer, which sped the whole process up considerably. (Read more about the interest, payments and charges associated with bridging loans.)

All of this meant that we were able to provide the customer with the full amount she needed in an extremely short space of time, clearing the way for her to proceed with the flat purchase as originally planned.