Buy to let cash purchase for property portfolio with day one refinance

THE SCENARIO

My client was looking to improve his portfolio by purchasing a buy to let property in a block of flats based in London, of which he incidentally already owned 2 out of 4 of. This was more of an unusual buy to let case, however, as my client was purchasing the third property from a limited company of which he had a part interest in, and wanted to buy into his personal name.

Another challenge I faced with this deal was that the limited company had very recently purchased the property in cash so he would require a day one refinance which most high street lenders will not consider. This is mainly because the majority of regular lenders require 6 months to have passed before they will accept a refinance on a property that has been bought in cash.

Unfortunately, 6 months had not passed since the limited company had bought the property, so most high street lenders were unwilling to accept a day one refinance on my client’s purchase. Additionally, a lot of lenders have a problem with one person owning the whole, or majority of, one apartment block.

Despite this, I was able to find a lender who was happy to accept my client’s application on the basis that this was effectively a bridging loan and he could use the other properties in his portfolio as security. As a solicitor, my client also already had a personal loan through an associate, of which he was using to help with the purchase of the property.

OUR SOLUTION

The lender was willing to refinance on day one on a 4.19% discounted rate which came with no early repayment fees. This meant my client would also be able to remortgage onto a better rate with a regular lender once 6 months has passed since the cash purchase.

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