Factoring potential future developments for a refinancing strategy

Overcoming several complications case study

Loan Amount:
£460,000

Property Value:
£700,000

LTV:
64%

By refinancing onto one of our specialist BTL mortgages, borrowers can get their affairs in order, and put themselves on a more steady footing for their long-term plans.

But, where clients plan to sell their security for the exit strategy, it can make that preparation difficult. A borrower sought refinancing capital to organise their affairs but given the relatively long length of their term with us, it made it difficult to factor in relevant sales and pricing data.

To find a solution, our underwriter got to work.

It’s hard to fully predict what’s on the horizon

From the outset, we noted the borrower was a seasoned BTL investor, who has sensible plans to clear an existing facility with our finance. We were confident they’d be able to cover the repayments in the interim but, the planned exit strategy posed challenges.

The property investor planned to sell the asset at the end of the term. This made it hard to factor in sales statistics, as any current data wouldn’t be relevant to the market at the term’s end.

To mitigate this, our underwriter included a condition to have the property put on the market within certain timeframes – diminishing the risk involved. With contingency plans in place, coupled with the security’s solid desirability, we were able to provide funding quickly.

We adapt to the market’s needs

More longer term mortgages are coming to the market and at MFS, we recognise that borrowers require optionality in this area. Which is why we are excited to be launching a new Bridge Fusion product, designed to offer a flexible, medium length solution for borrowers.

Now, across our products, we can accommodate immediate concerns, through to longer plans.

What’s more, all our loans continue to be available for a broad range of property types of circumstances. We’re there for investors looking to purchase simple residential assets, as well as those who require complex finance for a tricky corporate setup.