Somo has completed a £350,000 second charge bridging loan enabling a borrower to secure a buy-to-let property at a substantial discount while also clearing historic mortgage arrears.
The specialist lender structured the facility against the borrower’s main residence, allowing them to complete the purchase of a property valued at £500,000 that had been agreed for £350,000 after the vendor required a quick sale before relocating overseas.
The borrower had no available capital to fund the purchase and had also accumulated six months of mortgage arrears after taking time away from work to care for an elderly relative.
Although they had since returned to work and resumed their mortgage payments, the outstanding arrears limited their borrowing options.
ROUTE TO REFINANCE
An independent valuation confirmed the property’s open market value at £500,000, with Somo satisfied that the discounted purchase price reflected the seller’s circumstances rather than any issues with the asset itself.
Using its second charge product, Somo cleared the existing mortgage arrears and released sufficient capital to fund the purchase, creating significant equity from day one and establishing a route to refinance onto a long-term buy-to-let mortgage.
Three months after completion, the borrower remains up to date with their mortgage payments, the property is generating rental income and plans are underway to refinance onto a buy-to-let facility.
COMMON-SENSE VIEW
Rob Johnson (main picture), underwriting director at Somo, says: “At Somo, we look beyond credit blips and focus on the wider picture.
“In this case, the borrower had experienced temporary financial difficulties while caring for a family member but had returned to work and resumed their commitments.
“By taking a common-sense view of the circumstances and recognising the strength of the opportunity, we were able to clear the arrears, facilitate the purchase and help the borrower secure a property with substantial equity from day one.”
