2nd charge in 8 working days, EN7

Published by MT Finance on 21st March 2023 -

Client circumstances:

Our client required £242,000 to repay an existing charge which was secured against their main residence and had been used to fund the development of another residential property. With this now due to be repaid, they urgently needed a short-term fix to avoid any financial penalties. Having already approached one lender who was unable to work to their timescales, their broker contacted us.

 

MT Finance solution:

The clients needed to complete by 19th January and having received the completed enquiry form from the client on the 10th, we immediately got to work. The offer was issued on the same day and the valuation was instructed just a few hours later. The checklist was issued on the 11th and once the borrower’s solicitors confirmed they had been instructed on the 12th, we also instructed our solicitors. The valuation report was received at the beginning of the following week with the legal mortgage issued immediately after. This enabled us to complete two days later on 19th January, as per the borrower’s deadline.

We issued a second charge bridging loan of £242,000 with a loan-to-value of 42% based on the security property’s on-the-market value of £685,000. The term was set at 18 months.

 

The benefits:

Our ability to move at speed enabled us to complete in only eight working days. As the existing lender did not need to give permission to the second charge this helped to speed up the process. All that was needed was a redemption statement. With the funds received on time, the client was able to repay their first charge without incurring any late charges.

They now have 18 months to complete any works on the development project which they will then sell at its increased value, allowing them to repay our bridging loan. If this happens before the end of the term then they won’t face any ERCs.