Overview
LocationUsed by us to distinguish where the property is that the loan will be made against. Lenders can be location agnostic, and believe that different locations should attract different Underwriting Criteria and pricing : Central London
LoanWhen something is borrowed by one person / entity from another. Normally it refers to money, and a rate of Interest is charged whilst the debt remains outstanding. More Type : Bridging FinanceIn Real Estate a Bridge Loan is a short-term loan that is used to cover a funding need until a longer-term arrangement can be put in place. People bridge for a number of reasons; to purchase an asset quickly (perhaps at auction), to re-furbish a property (add value), to purchase a property from a receiver / foreclosure, or if a property is not yet financeable by a traditional lender (fire damage is one example). Bridging is more expensive, due to its shorter term nature, and perceived higher risk. The repayment source or Exit Strategy, is normally sale of the asset or Re-finance (once value is added / works are completed).
LoanWhen something is borrowed by one person / entity from another. Normally it refers to money, and a rate of Interest is charged whilst the debt remains outstanding. More Size : £ 25m
Loan-to-ValueThe ratio of debt to property value, expressed as a percentage; for example a Borrower that obtains a Loan of £ 6,000,000, against a property value of £ 10,000,000, would be expressed as 60% LTV. : 55%
The Situation
Our client was an international property investor. He wished to purchaseThe act of buying something from another person, or in property terms, buying a property from another person. a new property for £ 28.5m, and wished to use his existing property (value of £ 19.125m) that was to be sold, as joint securityAn Asset used as Collateral for a Loan. for the loanWhen something is borrowed by one person / entity from another. Normally it refers to money, and a rate of Interest is charged whilst the debt remains outstanding. More.
The Challenge
Our client owned several overseas companies, which owned rights to unrealised natural resources. Whilst the potential value was high, the values were difficult to corroborate, and income for the businesses was non-existent.
The client had exchanged on the new property and needed to complete within a short time-frame, otherwise he risked losing his depositThe net difference between the acquisition price of the property and the value of the Mortgage. It can be expressed as a monetary value, but more often as a percentage figure; e.g I can get 65% LTV Mortgage, therefore my deposit is 35%..
The properties were seen as trophy properties, and it is difficult to get lendersA company or person that lends money to another. to transact on one property of this value, let alone 2x properties of this size.
The Outcome
We were able to overcome a multitude of issues, and transact in 4 weeks from start to finish, enabling the client to secure the new property.