BTL funding available at 100% LTV with a second charge

by Malcolm Jones

10:40 AM, 1st July 2015
About 3 years ago

BTL funding available at 100% LTV with a second charge

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BTL funding available at 100% LTV with a second charge

Challenger bank Shawbrook will fund 100% for Buy to Lets. They will lend up to 75% Loan to Value (LTV) on the property being purchased and then take a second charge over another property if there is enough equity up to a total of 70% of its value.Shawbrook

For example if the second property was valued at £200,000 and had a first charge mortgage of £100,000 then £40,000 of the available equity could be used to contribute to a 100% mortgage on the first property.

This facility has many uses such as:
• Auction Purchases
• Property refurbishment
• Where the existing mortgage on the second property has a very attractive interest rate, maybe 1% over base and you don’t want to lose that rate
• Insufficient cash for a deposit

This facility is available for individual properties or portfolios and the interest charged is the same for the second charge as for the first charge mortgage.

Recent Case Study:

Reader from Leicester owned a portfolio of 9 BTL properties in and around the surrounding area. He had the opportunity to purchase another property, but was short of deposit funds. The purchase price was £180,000 and he was offered a mortgage of £135,000 with Shawbrook, leaving a balance of £45,000 required. He was fortunate that one of his properties was worth £320,000 and had a mortgage of £160,000. He was understandably reluctant to re-mortgage the property on which he was enjoying an interest rate of only 1.2% over base. Shawbrook were happy to advance an additional £64,000 on a second charge. This allowed the client to purchase the property and gave him an additional £19,000 which he used to improve both of the properties.

If you need help with something similar or any other type of property finance just fill in the form below and I will be happy to help 🙂

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Comments

Is the Freeholder partly responsible?

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