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Case Study – Auction Refinance Within Six Months – London

Case Study – Auction Refinance Within Six Months – London

5-Star Award-Winning Mortgage Broker★★★★★

Background

February 2023

As existing clients to The Buy to Let Broker, who we began dealing with in 2020, the London based investors were looking to acquire a new property at auction to renovate and add value to. 

Utilising their established relationship with buy to let specialist Adam, the clients had reached out for suitable options to purchase the property in joint personal names, which they then planned to maintain as part of their expanding property portfolio. 

They also wished to minimise their exposure to bridging finance and already knew that they wanted to remortgage away from the initial finance to a more palatable term buy to let mortgage product at the earliest opportunity, which would likely be inside of 6 months of the initial purchase. 

Adam Kipling

Buy to Let Specialist

If you are looking for bridging refinance, you can get in contact with Adam today by calling 08009499410 or by sending him a quick email

The Buy to Let Broker Adam Kipling Mortgage Broker

The Challenge

The major challenge we faced with this particular case was that most mortgage providers will apply the CML 6-month rule, meaning that a re-mortgage application cannot be considered within 6 months of ownership.  

For lenders who will allow this, they will normally work from the lower of the most recent purchase or current market value (unless significant improvements can be evidence). 

Additionally these lenders tend to operate in the specialist sphere and with the clients having taken their own independent tax advice, they wanted to pursue this purchase in personal names and thus take advantage of high street buy to let rates.  

Therefore, whilst we had specialist lenders as a ‘back stop’ option, the clients were keen to find a high street solution, considerably narrowing down the available options.

Our Strategy

Stage one was therefore the task of finding a suitable bridging facility.  Keen to support the clients and deliver the exact results they were hoping for, Adam used his vast array of industry contacts to quickly pinpoint a suitable finance deal for the initial auction purchase via specialist lender, Lendinvest. 

This initial application was secured smoothly and the funds released in ample time for the auction’s 28-day deadline which allowed the client to get the property under their control.. 

Stage two of the transaction for Adam to find a keen exit route.  Given the market instability at the time, Adam was then keen to secure the best possible rate as quickly as humanly possible, to enable securing a very competitive rate at that time in the market.

Given his knowledge and expertise within the marketplace, he was aware that HSBC would in fact allow a ‘day-one remortgage’ and would simply work from the market value of the property following inspection from their appointed surveyor. 

Working closely with the clients, both case manager Abby & Adam worked tirelessly to submit the application to HSBC at the earliest opportunity, with the plan being that the valuation inspection would dovetail with the work being completed and thus secure the clients the finance they needed within their desired timescales.  

The Buy to let Broker Phone Kensington

The Results

Property Value£380,000
Loan Amount£202,600
LTV53%
Mortgage LenderHSBC

The plan worked extremely well, and Adam was able to secure the clients an extremely competitive offer for a 5-year fixed rate, at a time of almost daily rate increases. 

Had the team not been as prompt as they were by submitting the remortgage application when they did and thus securing the rate, the clients could have been faced with a best case scenario of a higher rate or a worst case scenario of an application decline, due to the impact of the new increased ICR calculations that were then introduced.   In other words an increase in rate impacting and reducing loan size..

This would have meant that the clients would have not been able to raise the sufficient capital on a remortgage to enable them to exit the bridge and would have left them in a precarious position. 

Thankfully, Adam and the team’s expertise, foresight and tenacity meant the clients were not only able to purchase the property, not only able to refinance within their original timescales but were also able to future proof their profitability by securing an affordable exit solution in line with their original long term goals. 

Needless to say, the clients were thrilled with both Adam’s service and advice and they continue to work closely with him on their future portfolio plans.

Chat To A Mortgage Expert

The Buy to Let Broker Rachel, Louise and Matt

Feefo Platinum Trusted Service Winner 2020, 2021, 2022, 2023 & 2024 ★★★★★

If you have a need for speed when refinancing your investment property, you can chat to Adam or any of our specialists by calling 08009499410. You can also request a callback by entering your details below.

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