When it comes to exiting a bridging loan, time is money. I recently secured a bridge exit for a self employed client who had recently been forced to arrange the voluntary liquidation of her company after being left in a difficult position by her accountant.
My client had taken out a bridging loan in the first place because she needed to complete quickly on a purchase. She was steadily building a buy to let portfolio, this being her second rental property.
She was based in London, and was the 100% shareholder in her own limited company. She was looking to come off the bridging loan onto a cheaper product as soon as possible, as it was costing her £4,500 per month.
Whoever recommended the bridge to her, however, had not warned her that many lenders will not offer what is termed a ‘day one remortgage’ – a remortgage where the property has been owned for less than 6 months. This meant we would struggle to find a lender willing to offer her a cheaper product so soon.
There was a further complication, however. Back in 2013, her accountant had been arrested for fraud. His firm had recommended that she liquidate her company, although it had been performing very well with sustained profits and no debt. She duly did so, and restarted her firm. This meant, however, that she had no accounts to show, as the old company didn’t exist anymore.
Every lender who would consider a ‘day one remortgage’ wanted to see two years’ worth of accounts – which were not available.
I explained her case in detail to a particular lender with whom Enness has close ties. Based on how upfront and honest she had been about her situation, this lender was prepared to treat her as though she had already been trading for one year (which, of course, technically she had).
In this way I managed to arrange an exit from her bridging loan. Best of all, her new product has no Early Repayment Charges, meaning she can remortgage again in the near future when she has proper accounts in order to secure an even better rate.