Somo has completed a £145,000 second charge bridging loan to help two portfolio landlords clear mortgage arrears and resolve a title restriction while preparing to sell part of their property portfolio.
The 18-month facility was secured against a residential investment property valued at approximately £460,000, which had an existing first charge mortgage of £65,000.
The borrowers had accumulated arrears across several buy-to-let mortgages, while unpaid management company charges had resulted in a restriction being registered against one of their property titles at HM Land Registry.
Adverse credit records had limited their ability to obtain mainstream finance, leaving them needing an alternative funding arrangement to settle the outstanding liabilities and avoid having to sell properties under pressure.
Somo provided the funding through its Landlord Breathing Space Second Charge product, using the equity in one property as security without requiring the existing first charge mortgage to be redeemed.
PROPERTY SALES PROVIDE EXIT STRATEGY
The loan enabled the borrowers to bring their mortgage accounts up to date, settle the outstanding management charges and remove the restriction on the property title.
Repayment is expected to come from the planned sale of two properties within the portfolio, with the 18-month term intended to give the landlords sufficient time to complete the disposals without having to accept a reduced price for a quick sale.
Jade Keval, chief operating officer at Somo, says: “Arrears don’t always tell the full story. Here we had experienced landlords with real equity in their portfolio and a sensible plan to sell two properties.
“What they needed was time, and the arrears were making that time very expensive.
“By taking a second charge behind a low first charge mortgage, we were able to clear the arrears, deal with the title restriction and give the borrowers the breathing space to sell properly rather than in a rush.
“That’s exactly the kind of situation our second charge lending is designed for.”
