Client situation.
A broker introduced an experienced landlord with a 9-property portfolio who needed to refinance away from their existing lender. That lender had appointed a receiver against one of the borrower’s properties, so the refinance had to clear the incumbent facility and remove the receivership pressure.
The borrower’s credit profile was the complication most lenders would stop at. There were annulled bankruptcy notices on file, plus a CCJ registered in 2021 and satisfied in 2022.
The security was a 3-bed, 3-storey mid-terrace with a garage and parking in Birmingham.
Our solution.
We assessed the adverse credit in the context of the wider portfolio and the exit, rather than treating the markers as an automatic block. The annulled bankruptcy notices and the satisfied 2021 CCJ were historic and resolved, and the borrower’s track record across 9 properties supported the case.
We structured a £180k gross facility over a 12-month term with interest retained, at 72% LTV. An AVM on that property came back with a down-valuation, which left a shortfall in the required funding. Rather than reprice or pull back, we took a second charge for comfort over another 3-bed terrace in Birmingham, at 50 LTV. That second charge closed the shortfall created by the AVM and let the deal hold at the figure the borrower needed.
The matter was handled on dual representation to keep the legal process moving on a single track.
Result.
The borrower refinanced out of their existing lender and cleared the receivership against the property. The exit is a refinance onto a buy-to-let term mortgage once the bridge has done its job.
For a broker, this is the case to recognise when an experienced landlord has resolved adverse credit on file and a valuation comes back light. Neither point has to end the deal. Adverse history assessed in context, and a second charge taken to cover an AVM shortfall, can keep a refinance on the table that a checklist would have turned away.
Got a similar refinance deal? Let’s discuss how we can help your clients.