Addressing How a Shortfall Would Be Covered for a BTL Investment

Loan Amount:
£2,078,000

Property Value:
£2,960,000

LTV:
70%

A borrower, who we had worked with many times prior, came back to us for support with their refinancing needs. Our funding was to be used to cover an existing facility already secured against some of the client’s portfolio.

However, as we progressed through the deal, we discovered there would still be a shortfall that would need to be addressed. Our underwriter had to make sure the ongoing repayments would be covered, while the exit strategy also needed to be secured.

Fortunately, as we had worked with this client before, we knew how to proceed to ensure this case went as smoothly as possible.

Working with everyone involved to find solutions

For the ongoing repayments, we worked with the broker involved to clearly establish how the shortfall would be covered. By going through the borrower’s background thoroughly, we saw that they planned to cover the shortfall with other, separate assets.

We also worked with the borrower’s solicitors to confirm that we’d be able to progress with this plan. What’s more, the borrower planned to refinance for the exit strategy.

As such, we conducted several affordability checks to ensure that would be possible down the line. We saw that many long-term lenders would be able to work with this case and given the borrower’s experience and history with us, we were able to deliver funding.

We’re happy to hear from those with difficult situations

The mainstream lending market, while recovering, is still struggling with the state of the economy. Lending criteria is tightening, and high street banks are unlikely to have much capacity for deals with shortfalls and other complications.

But, at Market Financial Solutions, we have tools at our disposal specifically designed to help with these kinds of difficulties. Across our bridging and BTL products, we have top-slicing, various interest payment plans, and other tools available to help borrowers with their affordability and investment plans.

We’ll continue to find solutions where we can for borrowers with challenging backgrounds. Regardless of whether this involves missed payments, CCJs, or shortfalls.

FAQs

How can bridging finance help if I’m facing a shortfall during a BTL purchase?

We offer bridging loans that can fill funding gaps when circumstances change, such as an unexpected valuation drop, lender shortfall, or reneged sale. By topping up the shortfall, we can help you complete the purchase without delay, ensuring the deal closes smoothly even when other lenders might struggle to accommodate last-minute funding issues.

Do your buy-to-let products offer flexibility over repayments?

Yes. Our BTL mortgages allow flexibility through options such as rolled-up interest, deferred payments, and top-slicing. Additionally, our Bridge Fusion offers similar options, cobining the speed of bridging loans with the flexibility of BTL mortgages. This gives investors the freedom to adapt payments based on rental income, project progress, or refinancing, so they’re not locked into rigid repayment schedules.

Will you support a borrower even if they have recent credit history issues?

Yes, we often support borrowers with past credit issues provided their current financial position supports the loan. In the referenced case, the investor had missed payments but still secured refinancing and a new investment facility. We focus on present cashflow, asset quality, and exit strategy rather than penalising historic credit events.

Can I refinance onto a BTL mortgage if I own the property through a company or offshore structure?

Absolutely. Our underwriting supports applications from special-purpose vehicles (SPVs), corporate entities, and offshore companies, as well as overseas investors. We’re experienced in handling different ownership structures and apply consistent criteria based on asset quality and exit planning – not borrower domicile.

What range of property types do you consider for BTL lending?

We lend on a broad spectrum of buy-to-let property types, including single-let homes, HMOs, multi-unit freehold blocks, mixed-use premises, and holiday lets. Our products are designed to accommodate both standard residential and more complex or commercial-infused scenarios, as long as the asset offers a viable rental income and exit route.