Somo, a bridging lender, has completed a loan that allowed a borrower to purchase a buy-to-let property for £350,000 despite its market value of £500,000. This transaction also cleared six months of mortgage arrears for the buyer.
The deal involved a seller who needed a quick sale due to relocation overseas. Despite the property’s valuation at £500,000, the seller accepted £350,000 to cover their mortgage and relocation costs. The borrower faced financial complications due to accumulated mortgage arrears incurred while caring for an elderly relative. Even though the borrower had resumed payments after returning to work, the arrears made conventional financing inaccessible.
Somo structured a second charge against the borrower’s main residence, lending based on the property’s confirmed market value of £500,000. The lender saw the discounted purchase price as a result of the seller’s personal situation rather than any issues with the property itself.
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The second charge released enough capital to clear the arrears and complete the purchase. Now, the borrower is current on payments, and the property is generating rental income.
The borrower is pursuing a long-term buy-to-let refinance, which will replace the bridging loan with a conventional mortgage. This structure mirrors broader trends in the buy-to-let sector, where investors seek opportunities despite stricter lending conditions.
Specialist finance providers like Somo are increasingly facilitating transactions that don’t fit within mainstream lending guidelines.
The company looks beyond temporary financial setbacks and evaluates the overall financial picture. The borrower had faced short-term difficulties while caring for a family member but had returned to work and resumed their financial commitments.
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Those who need immediate financing often rely on bridging loans. These arrangements allow purchases to happen quickly, even when conventional mortgages aren’t feasible.
Borrowers in similar situations might face challenges with conventional financing due to strict lending criteria. However, specialist lenders like Somo can step in to facilitate these transactions. There are always opportunities in the buy-to-let market, even as lending criteria tighten.
It is complex property purchasing, especially when dealing with distressed sellers or buyers with credit complications. Yet, these challenges don’t necessarily mean a deal can’t be struck. Some borrowers might find that bridging loans provide the necessary flexibility to move forward with a purchase.
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The property purchased in this transaction is valued at £500,000 and bought for £350,000. The deal structure is unique because it involved a second charge against the borrower’s residence, which isn’t common in conventional transactions. Now, the borrower is working toward conventional refinancing, which will replace the bridging loan with a long-term mortgage.
This transaction demonstrates how bridging finance can enable property acquisitions where timing constraints and credit histories prevent conventional mortgage approvals. This sector attracts investors who see opportunities despite tighter lending criteria.
The borrower is making progress toward standard buy-to-let refinancing. This would replace the short-term bridging facility with a conventional mortgage product. This transaction highlights the value of specialist finance providers in facilitating deals that fall outside mainstream lending parameters.
