Immediate and Long-term Challenges Threaten to Derail a Residential BTL Investment

Loan Amount:
£425,000

Property Value:
£600,000

LTV:
70%

A borrower turned to us with both historical, and long-term challenges. Issues in their financial history threatened to limit their investment options, and potentially delay their refurbishment plans.

What’s more, uncertainty over the long-term state of the wider market also posed challenges. Given how rates have moved in recent months, the borrower wanted to explore their refinancing options in a few years’ time for the exit strategy. This may have proven tricky with their financial history.

Nevertheless, our underwriter was committed to finding a way forward for this borrower, who was otherwise a successful property investor, with plenty of experience behind them.

Utilising Our Unique Repayment Options

To start, we addressed the issues in the borrower’s financial background. By looking into the details, and gathering all the relevant evidence, we quickly determined that all the borrower’s obligations had been covered.

This helped with our deliberations for tackling the exit strategy. We saw that they should have had no problem moving onto long-term finance down the line. But, given that the borrower wanted to explore their options in a few years’ time, and they had yet to secure tenants for the property, there was medium term risk to contend with.

Fortunately, the underwriter was able to utilise our unique repayment options to provide the borrower with breathing space, and mitigate the risks. We delivered BTL funding that allowed the borrower to progress with their purchase.

Entering a Challenging Period

Financial histories are set to play a bigger part in the property market over the coming years. It’ll be up to lenders to find a way forward in the face of the looming challenges.

Some 8.38 million people have experienced adverse credit in the last three years according to Pepper Money, the highest level seen since it launched its regular specialist lending study. Mainstream lenders may become increasingly hesitant seeing such statistics.

This is where specialist lenders can play their part. Across our products, from bridging finance to Bridge Fusion loans, we’re happy to hear from those who may have less-than-ideal backgrounds.

Our underwriters can consider missed payments, CCJs, bankruptcies and more. If any of your clients are struggling with these kinds of issues, we’re ready for your call.