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p>A principal lender has completed a loan at almost 90% LTV for a commercial-to-residential conversion, despite a down valuation of £50,000.
In a recent deal, Mint Bridging stayed true to their yes-means-yes approach by sticking to their proposed loan value of £175,000 even though the valuation came back lower than planned.
This resulted in a loan at 87.5 per cent Loan to Value (LTV) on a £200,000 pub that was down valued by £50,000 from its estimated amount of £250,000.
After the lender’s in house asset manager predicted the property should be priced at a minimum of £250,000, it was stated that the loan should proceed at £175,000, providing a maximum of 70 per cent LTV.
The property’s price was predicted at a minimum of £250,000 because of the former house attached to and under the same title as the pub, which could be sold off separately after refurbishment.
The closed-down pub in question was purchased by the client at an auction with the intention to be converted into a residential property.
However at valuation, the surveyor disagreed with the pricing estimations made by Mint Bridging or the client’s project. They didn't agree there would be a demand for the conversion or for the adjoined property, resulting in a down value of 50k.
After deep consideration with its internal planning consultants and the valuer, Mint Bridging decided to proceed with the loan.
Discussions with planners have been favourable, with the adjoining unit being prepared for marketing in January. Its sale will dramatically lower Mint’ Bridging’s exposure or potentially the sale could repay the entirety of the loan.
The Client is servicing 1.4 per cent monthly interest for the facility which is on a six month term.
Andrew Lazare Managing Director of Mint Bridging, said: “As brokers are beginning to understand the way we do business this was a real test of our yes- means-yes approach.
“It would have been too easy to simply reduce the loan amount from our indicative offer from £175,000 to £140,000 or below, but due to the experienced team we have and the fact we are privately funded, we were able to stick to what we agreed and are happy with the loan.”
Over the last 2 months, the lender has appointed ex-Bridgebank member Richard King as it's new BDM and Trevor Brown as it's underwriting manager.
Mint Bridging is actively recruiting for a new BDM, with intention that the role be initiated by January or February 2014.
A principal lender has completed a loan at almost 90% LTV for a commercial-to-residential conversion, despite a down valuation of £50,000.
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