A broker can turn to us when it becomes harder to raise funds for a specific client. A first-time landlord may want to expand their portfolio, but their lack of experience will prevent them from accessing finance with high street lenders.
Say a client invests in a home at a low price. At first glance, it would have seemed like a bargain, but its cheap value was actually the result of the fact there was limited demand in this corner of the residential market. As a result, it will generate a low yield.
Given this, the broker here will struggle to raise capital for the planned expansion. Even if the plan itself was solid and filled with potential.
Increasing Loan Amount
Fortunately, at Market Financial Solutions, we have tools at our disposal to increase our loan sizes where possible, and suitable. To start with, unlike mainstream lenders, our loans are based on a property’s (or portfolio’s) value, as opposed to a borrower’s income level. Here, so long as the portfolio’s value was high enough, we’d be able to find away forward.
Also, to address the limited income issue, we could utilise top-slicing. Say this borrower generated £10,000 a month from their business operations, while their monthly expenses amounted to £5,000. this leaves £5,000 in disposable income, and we could take this ‘top slice’ of income to support the capital raise.
Moreover, we could further increase the borrowing potential for the client by rolling and deferring a few months of interest. This would provide more breathing space for the borrower to organise their affairs, and try to raise their yield.
Further reading:
- Featured Product: Buy-to-Let Mortgage
- Explainer Video: Buy-to-Let Mortgages
- Criteria: Buy-to-Let Loan Criteria
- Tool: Buy-to-Let Calculator
- Blog: Top-slicing mortgage: How to get a larger loan?
- Blog: The benefits of Buy-to-Let: is BTL still worth it?
