Categories: Case study | commercial mortgages

Many clients that come to us need to secure mortgages within tight deadlines. Fortunately, our advisors and account managers have strong relationships with lenders from across the marketplace and can work with them closely to complete a deal as quickly as possible. 

This client had a specialist semi-commercial remortgage request for a clothes shop with a holiday let above. They were investing in the property through their trading business, and specifically asked their advisor to find a product that did not place any charges over their wider business assets.

This was a key detail for the advisor to consider, because some commercial lenders will put in place what are called debentures when an investor is buying property through a trading business. 

Debentures are floating charges which would be registered against any assets in the limited company from business stock to properties. They essentially give lenders security over everything the company owns, which can be claimed by the lender, if the mortgage is not paid.

The stand-out success of this case was the speed at which the deal was completed, and the challenges we overcame to achieve it.

The case

  • Investment route:  This application was via a limited company.
  • Existing portfolio: 8 properties.
  • Loan needed:Capital raising £200k to repay vendor finance.
  • Property value: £500,000

How we helped the client

The client had previously dealt with another mortgage broker. After six weeks of conducting product searches on the client’s behalf, the other broker was unable to provide a recommendation at the end. With so much time already wasted, the client’s timeline to get their property remortgaged was severely reduced.

This was where the time pressure stemmed from.

Semi-commercial or ‘mixed-use’ mortgages can be challenging, because lenders have strict criteria for what constitutes a semi-commercial property. 

A semi-commercial property needs to have a commercial and residential element, but lenders take a range of approaches on the amount of the footprint of the property that they will allow to be residential. They may also place stipulation on the value the residential element has to achieve, as a percentage of the total value of the property. As such, lenders are always particular about how the overall space is used.

The proportion of the client’s property that was residential was too small for some lenders. Nonetheless, our advisor was able to narrow their search down to a suitable lender, by finding those that based their assessment on the value of the residential element of the property, as opposed to the size of the floor area of the residential element.

Mindful of the time pressure on the case, the advisor worked with the client to get an application for a decision in principle submitted later the same day of enquiry. 

However, due to the complexity of the case, it was referred to the lenders underwriting team, which delays the process as the lender reviews the case.

The usual turnaround time for the lender’s underwriting review was five working days. But, conscious of the client’s tight schedule, the advisor stepped in to speak to the lender and successfully pushed this part of the process through in three days.

From that point on, the assigned account manager was able to take over. They liaised with solicitors and kept the client informed every step of the way. 

Their hard work and persistence allowed them to push the deal through to completion in 5 weeks and 5 days, much faster than the typical 10-12 weeks for these kinds of cases.

The client was delighted with this service, especially in comparison to the previous broker that failed to get any result at all. The consistent communication from the advisor and account manager was particularly praised, and the client promised to use our service again in the future.

Do you need help securing a commercial mortgage?

If you are a landlord or property investor and you need help getting a mortgage for a commercial or semi-commercial property, get in touch:

  • For fastest service, call on our Freephone number to get straight through to an advisor, or;
  • Live chat with a mortgage advisor, or;
  • Request a call-back online.