Landmark Specialist Finance has arranged a £1.14 million two-year facility with StreamBank after adverse credit prevented its clients from using their planned mainstream mortgage to exit a bridging loan.
The term loan, secured against a refurbished Hackney property valued at £2.34 million, has an LTV of about 49% and replaces the prospect of the borrowers taking another 12-month bridge.
StreamBank structured the facility specifically for the case, despite not currently offering term mortgages in the mainstream market. It gives the borrowers two years to rebuild their credit profile before seeking a mainstream remortgage, subject to eligibility at the time.
The £1.14 million loan redeemed the existing bridge and released a further £340,000 to cover refurbishment costs. The property is now fully let, with the basement flat and upstairs maisonette producing combined rental income of £9,900 a month.
EXIT PLAN DISRUPTED
The borrowers had originally acquired the Hackney property for £1.3 million. During a lengthy probate process, one of the original purchasers died and his widow subsequently joined the transaction as a co-applicant to enable the purchase to complete.
Because of the condition of the property, Landmark initially arranged a £750,000 net bridging loan from StreamBank to finance the acquisition while refurbishment work was undertaken.
However, as the bridge approached maturity, a change in one applicant’s circumstances had led to recent adverse credit. That ruled out the intended move to a mainstream term mortgage while the property remained vacant, leaving another 12-month bridging facility as the alternative exit.
Landmark approached StreamBank about a longer-term solution, resulting in the lender structuring the bespoke two-year facility.
Gurmail Singh, head of specialist lending at Landmark Specialist Finance, says: “Recent adverse credit can close the door on a mainstream exit even when the property and the numbers stack up.
“Our job was to find a lender willing to look at the whole case, because the alternative was another year on a bridge at extra cost for clients who were already dealing with a bereavement.
“We were patient with them, and StreamBank’s willingness to build a bespoke product is what got it done.”
Aiman Maklad, business development manager at StreamBank, says: “This isn’t a product we offer off the shelf. The security was strong, and we understood the clients’ circumstances, so we were comfortable structuring two years that give them space to rebuild their credit.
“I don’t believe this significant deal would have happened without that relationship.”
