This client wanted to substantially increase the value of their home so they'd have a more significant amount of equity/profit once they sold their home. They could then move to a new home and upsize without needing to take out a larger mortgage.
The client's home was worth £4,500,000, and they had a £1,400,000 mortgage. They needed £1,000,000 additional borrowing to complete the works. Once the works had been completed, the property would be worth approx. £6,500,000, making the client a healthy profit. The client had already started some of the refurbishment using funds from their own source, so we were able to replenish those funds used, and they were able to use the remainder of the loan to finish the work.
The client needed to complete the remaining work quickly, so they needed a second charge bridging loan; a standard mortgage process would have been too slow. The client was also going to sell the property immediately after the work was completed, and they were happy with a higher interest rate as long as the loan had no early repayment charges.
Chris Lloyd, one of our Partners, located in our London office, was able to arrange a second charge bridging loan with no early repayment charges so the client could repay the loan at any point without incurring a penalty. Chris was also able to have the lender arrangement fee and interest payments added to the loan, so there were no serving costs. The loan and all interest/fees can be repaid when the property is sold.
The interest rate was just 0.89% pcm.