Almost Completed Development Site Overruns Current Loan
Our clients almost finished, wind and water tight, development site had overrun the loan term and as such had been repossessed by the current bridging/development lender and was now in the hands of the receiver.
The receiver was looking for an early auction sale to recoup the current lenders loan but our client wanted to salvage the situation in the best way possible. As he had given a personal guarantee for repayment of the loan, our clients previously good credit history was now under serious threat and he believed that once it became public knowledge that the site was a repossession the profit available within the site would no doubt be reduced or eradicated by the receivers achieved sale price and mounting costs.
Our client wanted to buy back the site and as such contacted UK Property Finance following a recommendation from a developer contact who had used our services in the past. A UKPF advisor spoke to our client in-depth but due to the lack of equity available within the site additional security was required to enable the buy back and to complete the remaining works.
Our clients sister offered her residential property as security albeit she already had a mortgage secured on the property. We obtained a finance agreement in both names to repay the current bridging/development finance with a bridging loan secured via a 1st charge across the development site and a second charge on the sisters residential property.
The funds were quickly in place preventing the auctioning of the site and extra receiver charges and the additional money was raised to complete the build. Once complete, our client had plenty of time to sell the properties in a controlled fashion and as such maximise his return to repay the new loan and release the charge over the sisters property.
The sister would also receive a bonus for helping her brother out of a very difficult situation.
UK Property Finance are highly skilled in sorting complex cases and have access to any lender in the market. We very carefully choose the right funder as every deal is different.
The chosen lender in this case was formed to tackle deals of this nature and offered a highly competitive rate of interest. UK Property Finance and our client were on a tight deadline to avoid the loss of the development site and our strong lender and solicitor relationships ensured a positive outcome.