A BTL investor seeks a property near shops, recreational facilities and a train station
A broker approached MFS seeking a buy-to-let bridging loan for a client looking to add to their growing property portfolio. The borrower already owned a number of investment properties in London and wanted to buy a new build flat in Birmingham.
The property was on the fringes of Birmingham city centre, within walking distance of shopping and recreational facilities. It was also near a train station, raising the property’s potential further.
However, the clients less-than perfect credit history held them back prior to approaching us, and we had to factor in other assets they owned to get the deal over the line.
Overcoming credit history problems
Our dedicated underwriter, Jemma Vaja, was assigned to the case. As the background checks were conducted, we came across adverse credit in the borrower’s history. This led to them struggling to obtain buy-to-let loans with other lenders.
To overcome this, we looked at the wider circumstances. They had a number of investment properties already under their belt and were up to speed with their existing credit accounts. We also noted all the missed payments on their file had been covered.
Given our experience of working with buyers with varying financial backgrounds, we felt comfortable the borrower could afford the loan. The strong location of the investment, along with having a solid exit strategy, also assured us the borrower could refinance down the line.
There is more to a person’s finances than their credit record
Any blips on a person’s credit history can make attaining finance with high street lenders and banks difficult. This can be true even if the issue happened many years ago and has since been resolved.
In the current economic climate, borrowers are likely to face more roadblocks going forward. In recent months, lenders have tightened their lending criteria in direct response to the cost-of-living crisis. Affordability calculations are tougher, while a number of banks have hiked the minimum income levels they’d lend on.
Here at MFS, we understand borrowers are more than just their credit rating. We specialise in assessment flexibility, taking into account the entire picture as opposed to a single frame. To understand how we determine eligibility for a bridging loan, check our FAQs.