Somo has completed a second charge bridging refinance within 10 working days after an existing facility was approaching the end of its term.
The lender provided the borrower with a 12-month facility at 70% LTV against the property’s open market value, priced at 0.95% per month through its Classic Bridging product.
The borrower approached Somo with just 10 working days remaining before the existing bridge went over term.
Failure to refinance within the deadline would have resulted in additional default interest and fees, potentially increasing the borrowing requirement and putting pressure on the borrower to sell the property quickly rather than wait for a suitable offer.
A further complication was the requirement to obtain consent for the second charge from the existing first charge lender.
EQUITABLE CHARGE USED TO MEET DEADLINE
Somo instructed the solicitor and valuer as soon as the case entered underwriting, with the valuation inspection and report completed within four working days.
Legal enquiries were also progressed alongside the valuation, leaving formal consent from the first charge lender as the final outstanding requirement.
Rather than wait for the consent process to conclude, Somo contacted the mortgage provider directly and established that consent would be granted once its internal process had been completed.
The lender subsequently agreed to complete using an equitable charge, with the borrower’s solicitor providing an undertaking to upgrade the security once formal consent was received.
Somo also retained the originally agreed 0.95% monthly interest rate despite the facility completing on an equitable charge basis.
The refinance completed within the 10-working-day deadline, allowing the borrower to avoid the additional default fees and interest that would have arisen on the existing bridge.
It also gives the borrower a further 12 months to market the property rather than having to consider a potentially accelerated sale.
‘DECISIONS NEED TO BE MADE FAST’
Joe Cash (main picture), senior underwriter at Somo, says: “Ten working days is a tight turnaround for any refinance, but speed is about more than just moving quickly, decisions need to be made fast too.
“We got the valuation and legals underway immediately, as always stayed close to the case throughout and when first charge consent threatened to slow things down, we found a sensible way forward.”
