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The Client’s Situation
A property investor approached us looking to refinance their 3-bed flat in North London.
The existing mortgage was with a lender that no longer offers buy-to-let mortgages, meaning the client needed to find a new lender to refinance the property to repay the existing mortgage.
The property was held in the client’s personal name, and the client needed to raise sufficient borrowing to fully repay the existing mortgage.
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The Challenge
There were several challenges to overcome with the refinance:
- As the property was held in the client’s personal name, the rental income did not provide sufficient affordability to achieve the required loan amount under the lenders current product range.
- The client’s credit history also limited the number of lenders available for the case.
- We therefore needed to find a lender that was comfortable with the client’s circumstances while also providing sufficient borrowing to repay the existing mortgage.
A standard approach could have resulted in the client being unable to borrow enough to complete the refinance and having to sell the property.
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Our Solution
We approached a lender with whom we have a strong relationship and were able to negotiate a pricing exception based on the circumstances of the case.
This allowed us to structure the mortgage in a way that maximised the amount the client could borrow while still meeting the lender’s affordability requirements.
We were able to negotiate the rate with the lender, securing a 5-year fixed-rate mortgage at 5.29%, with a 5% arrangement fee added to the loan.
The higher arrangement fee was an important part of the solution, as it allowed the lender to provide the maximum borrowing available based on its affordability assessment.
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The Result
The client was able to successfully refinance the property and repay their existing lender, despite the combination of affordability restrictions and credit history issues.
The final solution provided:
- Sufficient borrowing to repay the existing mortgage
- A lender comfortable with the client’s credit history
- A structure designed around the lender’s maximum affordability
The refinance also benefited from the lender’s streamlined process for existing properties. The lender was able to use its own internal solicitor and title insurance, helping the case complete within two weeks of the mortgage offer.
Looking ahead, the lender also offers product transfers without valuation or legal fees, giving the client a potentially straightforward option when the 5-year fixed period comes to an end.
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How can Advocate Finance help?
This case demonstrates that a buy-to-let refinance isn’t always as simple as finding the lowest interest rate, and not all buy-to-let remortgage applications fit standard lender criteria. Working with specialist lenders can provide additional options when affordability or credit history limits borrowing.
If you are looking to refinance a buy-to-let property and have any concerns including affordability or credit history, speak to us to discuss your options. We work with a wide range of specialist and mainstream lenders to find solutions that match your circumstances.
We provide a FREE assessment on all our services.
Please contact me directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.
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FAQs
Can I refinance a buy-to-let property with adverse credit?
Yes, some specialist lenders may consider applications from landlords with previous credit issues, depending on the circumstances.
What happens if rental income doesn’t meet affordability requirements?
Some lenders offer different affordability calculations or specialist underwriting approaches, which may increase borrowing potential.
Can I remortgage a buy-to-let property to repay an existing lender?
Yes. Many landlords refinance to replace an existing mortgage, release equity or secure a more suitable mortgage product.
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