About the Deal
We were recently approached by a client who came across our website for a bridge loan to cover the cost of an auction purchase. They had the winning bid to purchase some houses, so had just 28 days to complete or lose their deposit. However, unfortunately, both properties purchased were downvalued.
Downvaluations can be tricky, especially when there is a tight timescale like this. To compound the issue, the borrower hoped to use an existing property as collateral, but it was under renovation at the time.
Lending options were greatly reduced, but we worked closely with the lender and borrower to come up with a mutually beneficial solution.
Then came further complications. It turned out that this project was to be family run. The mother was to take out the loan to fund the property venture for her son.
So, as the parent would receive the money, but would not be the owner of the onward purchase, the deal became regulated and additional paperwork had to be produced, agreed and signed.
The lender’s solicitors also weren’t on their panel to deal with a regulated loan, but they decided they would proceed due to the tight time constraints.
Thanks to our hard work and perseverance, a solution was found, and the client was able to complete in time for their auction deadline. They now have a 12-month bridging loan with a gross debt of £160,000, so their foray into property can begin.
