Case Study – Portfolio Incorporation Across Multiple Lenders – Leeds
5-STAR RATED AWARD-WINNING MORTGAGE BROKER ⭑⭑⭑⭑⭑
The Leeds based clients initially contacted us for a chat about their potential mortgage options following a google search, as they were looking for a route to refinance their whole SPV portfolio as their once very competitive variable rates were now ever creeping up, making their investments less profitable.
Due to market volatility and prior base rate increases (plus expected future ones) naturally the clients wished to review all properties and secure new competitive rates as soon as possible – thus avoiding their SVRs blowing up and property profitability spiralling further.
They also wished to raise further capital simultaneously for onward expansion of the portfolio. There were 26 current properties at inception of our dealings, including two commercial properties and two multi-unit freehold blocks.
With a background of dealing with multi-faceted transactions, the challenge to find the right mortgage schemes across the portfolio, to maximise savings and minimise costs alongside raising capital at the right rate, was dutifully accepted by mortgage broker Chris Leek.
Buy to Let & Bridging Specialist
Our initial challenge was to understand the finer details of the entire portfolio and analyse the market viability across the array of properties that needed refinancing.
Of course, we also needed to understand the financial circumstances intimately. Our clients are IFAs running a large large multi-million pound wealth management company and also own a chain of gymnasiums alongside their property business. In total there were six sources of income across three directors, ranging from partnership income to salary & dividends in tandem with UK land and property income
As you can imagine the clients were keen to reach out to a few brokerages and understand what was being offered. But after Chris presented his final strategy for the project, along with detailing and evidencing the senior contacts we have negotiated with at the specialist lenders we would be using – we managed to win the business and our clients have since been extremely happy with the results and service.
After reviewing their portfolio and plans for the future (which included purchasing more properties at auction, renovating and refinancing), instead of simply refinancing each property at a low loan-to-value (LTV), therefore tying up each property, the suggested proposition was to leverage against half of the portfolio at a higher LTV (70-75%), thus allowing our clients to redeem the existing mortgages across the whole portfolio.
However, the key part was this would also leave the other half of the portfolio unencumbered and give a cash injection to the SPV to start purchasing properties outright at auction as well as leave funds to renovate. These properties could then be refinanced and enable the clients to release capital at a future point.
There can be an adviser temptation here to remortgage as many properties as possible to the one lender to make life easier for the client (and possibly the adviser!). However, with lenders’ exposure limits in certain localities this would restrict how competitive the mortgages were and would cost the client significantly more.
We also find that our HNW clients prefer not to have ‘all their eggs in one basket’ and therefore a split of lenders across the portfolio is also preferable for this reason.
Following extensive research Chris recommended various lenders, including Paragon, Aldermore and Fleet – which maximised savings, gave the clients a new deal which saved money over and above their existing mortgages and indeed also freed up over 10 properties to be remortgaged at a later date, which could be invested into the SPV effectively.
Aimee Cannon was the dedicated case manager for all of these cases and formed a great working relationship with the clients’ PA, assisted the negotiations on solicitor costs and diligently kept everything stuck together throughout the process.
Total Property Valuation – £2,695,000
Property Valuation for Incorporation – £1,310,000
Loan Amount – £955,400
Loan-to-Value – 72.9%
Mortgage Lenders – Paragon, Aldermore and Fleet
The end result aligned perfectly to the initial proposal, the mortgages were put in place and our clients have now expanded the portfolio, their current size is 32 properties.
We have also successfully refinanced some of the properties that have been purchased/renovated and let of late.
Overall the clients’ portfolio is now in considerably better shape and correctly geared to take advantage of more healthy acquisitions in 2024.
When asked about their experience the clients wrote: “Exceptional service, a high level of professionalism, expertise and a genuine care that exceeded our expectations”, alongside an”unwavering commitment” and “offering invaluable advice and insight that ultimately led to us securing a fantastic mortgage deals that perfectly suited our investment goals.”
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If you would like to discover competitive options for your portfolio as well as opportunities to maximise your investment, chat to one of our mortgage specialists. You can talk to us on 08009499410 or get started online right here.
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