Key Commercial Finance, the specialist commercial broker, has helped a client refinance a multi-unit freehold block of six apartments with a funding line of £532,910.
The property, in Ossett near Wakefield, is owned by a limited company, who were looking to reduce the costs of the finance and to improve the cash flow of their business.
The incumbent bank also wanted to reduce their exposure to the company and there were no Early Repayment Charges (ERCs) in place. The refinance opportunity was introduced by the customer’s accountants.
Having carefully looked at the client circumstances, Key Commercial researched their lender panel and found a reputable lender with an appetite for the client and property type, the lowest rate and fees, highest leverage and a willingness to provide a term to suit the clients’ repayment timetable.
The lender also allowed the arrangement and funds transfer fees to be added to the loan notwithstanding that this took the loan just over their maximum LTV of 75%.
With the lender valuing the property on a ‘bricks & mortar’ basis, rather than an Investment value/portfolio assumption, along with Key meeting their valuer on site armed with comparable evidence, the valuation resulted in being somewhat higher than on a portfolio basis.
As the case was being progressed, the lender had reduced their rate to 2.95% for new applications. With detailed lender product knowledge Key arranged with the client to apply for this lower rate and based on the “Treating Customers Fairly” rules as governed by the FCA, the lender accepted the application on the new product rate.
Legals were undertaken on a dual representation basis and the re-finance completed within two weeks of the client accepting the mortgage offer.
The mortgage for £532,910 was on an interest only basis with a 76% LTV over 15 years at a very competitive rate of 2.95% plus 3 month LIBOR.
The client is delighted with the quality and thorough approach by Key Commercial Finance and they are now paying around £6,000 less each year then they were to their previous lender – a saving of £90,000 over the term of the loan.
Tim Groves, Commercial Finance Consultant at Key Commercial, commented: “This was an introduction which came to me via the clients accountants having heard of Key’s expertise in working with an extensive panel of lenders and my reputation in property finance. With no ERCs in place it was the right time to refinance and, at the same time, look to reduce costs for the client. I found a lender and recommended a new product that had just been launched, then it all happened very quickly – just two weeks for the funding to be in place. The client was delighted with the professionalism and quick decision making by myself and the team at Key.”