<
p>Sometimes borrowers have completed a refurbishment or development project and want to repay their investors or development funders before all of the project property is sold.
Recently, United Trust Bank had the relatively unusual scenario where not only was the debt requiring refinance, but the completed refurbishment property was not used as security.
The borrower, who had been active in the London property market for over 30 years, had completed the £1.4 million refurbishment and extension of a Central London property.
The borrower needed to repay some of the development costs which had been covered by an overdraft facility and credit card. He was looking for a loan of £583,100.
The refurbished property was owned by another member of the borrower’s family and was being marketed for sale at £6.9m. However, the borrower and his wife owned another property which was also for sale which was used as the loan security by way of a first charge.
Given the different ownership of the refurbished property, the low LTV of 44 per cent and the fact that a £6.9 million home may take longer to sell than the lower value security property, Head of Bridging at United Trust Bank Alan Margolis said that this was a sensible and cost effective solution.
“This is a good example of the flexible and bespoke nature of bridging finance where the property behind the reason for the bridging loan was not used as the security,” Alan added.
Sometimes borrowers have completed a refurbishment or development project and want to repay their investors or development funders before all of the project property is sold.
Leave a comment