Case Study – Bridging Finance In Just 8 Days
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We were contacted by a brand new client who was in a state of anxiety, given he’d just taken an unexpected phone call from his son, who had just signed on a residential purchase via auction for an overseas property valued at £325,000 and needed cash quickly to complete the deal.
The client had been aware his son was looking to buy and had already submitted a remortgage application to raise the likely level of capital required. Expecting the funds to be needed in the coming months, the client had never anticipated his son would agree to a deal with such a tight timescale. It was quickly clear the existing mortgage lender was not going to complete the remortgage within the auction timescales, which at best allowed for 2 weeks to completion, especially with COVID-related lender processing backlogs to contend with.
The client had found The Buy to Let Broker through a simple Google search and spoke to buy to let and bridging specialist, Tom Headey.
Luckily Tom happens to be one of the most well-versed in the office on the topic of bridging finance and subsequently explained to the client that the only assured way to release the £159,000 required in the minimal 2-week timescale was via a short term bridging loan facility, the plan being that his mortgage application in progress would pay off this facility once ready.
Following the initial phone call and with the client’s agreement, Tom proceeded to negotiate competitive terms on the client’s behalf. Having taken the time to fully understand the client’s situation meant that Tom knew everything he needed in order to bolster the application and leverage a competitive deal from a number of lenders. Tom explained the nature of the transaction to his senior lending contacts and recommended the keenest terms available, which following review the client gladly accepted.
The intricacies of the application lay with the regulatory element, insofar as the client only owned a residential property and a single buy to let which was their previous home. In addition, the purpose of funds was for an onward residential purchase, albeit overseas. The bridging market is mainly geared towards unregulated lending for business transactions, whereas any security that is or has been a main home for the borrower, would fall under regulated lending. As an additional hurdle, there was a potential compliance obstacle relating to the transfer of a relatively large amount of funds at short notice overseas, so overall the deal had a number of facets to consider.
Clearly, Tom’s concern was in utilising a rapid lender who could release funds quickly and release the pressure, the initial lender approached was non-regulated and Tom had a high degree of confidence speed wise. This was initially agreed upfront to use the buy to let as security given the client had not resided there for many years, however on subsequent review by the internal compliance and risk team this was still deemed regulated which meant that they were unable to facilitate the release of funds.
A second lender also did an unexpected u-turn on the same basis.
With hopes of being ‘third time lucky’ in placing the case and time starting to ebb, the possibility of losing a deposit and other significant charges to be incurred, Tom was unperturbed and spoke to a key account manager at major player in the market, United Trust Bank (UTB), and only promised the deal on the basis of it being prioritised, reiterating the urgency.
Tom’s dogmatic and dedicated approach proved successful and a deal was agreed.
Paul Delmonte, Key Account Manager at United Trust Bank, said “Working with Tom on this case was great. Having an experienced and well-organised broker is key when working to a very tight deadline. Not only is it essential to provide the information quickly but also it has to be correct. Tom got the due diligence and packaging right first time with no issues and we were able to fund this case within 8 days. At UTB we pride ourselves on speed and service and this is a great example of where we can step in and assist by collaborating very closely with our broker partners.”
Working with UTB’s key account manager, Paul Delmonte, Tom not only agreed very competitive terms, but crucially an automated valuation and credit backed decision very quickly. UTB were able to consider the loan as fully regulated so the concern was alleviated immediately. Although no guarantees were given, UTB were happy to commit to the timescales, and with time to spare the loan was agreed and funds released to a very relieved and appreciative client, who quickly rang his son to pass on the good news.
In total it took Tom just 8 days to complete the loan. A tall order in normal circumstances, so this was an extraordinary result given the current impact of the pandemic.
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If you are looking for bespoke bridging finance and a dedicated broker, give us a call on 08009499410. You can also request a callback by entering your details below.
Any property used as a security may be repossessed if you do not keep up with repayments on your mortgage.