Second Charge loan clears portfolio Landlords’ arrears
Somo has completed a £145,000 second charge bridging loan enabling a pair of portfolio landlords to clear mortgage arrears across several buy-to-let properties, remove a restriction on their title and buy time to sell two properties.
Using its Landlord Breathing Space Second Charge product, Somo secured the loan against one of the borrowers' rental properties, where substantial equity sat behind a modest first charge and backed a clear exit through the sale of other assets in the portfolio.
The challenge
The borrowers, who jointly own a small residential property portfolio, had fallen behind on mortgage payments across several of their buy-to-let properties.
On top of the mortgage arrears, outstanding management company charges had led to a restriction being registered against one of their titles at HM Land Registry.
With adverse credit now on their files, the borrowers struggled to find a mainstream lender willing to help. They needed funds to bring their mortgages up to date and settle the management charges before the situation escalated, while giving themselves time to sell part of the portfolio on their own terms rather than under pressure.
The property
Somo took security over one of the borrowers' residential investment properties, which had an estimated value of £460,000 and an existing first charge of just £65,000, giving Somo comfort to lend on a second charge basis without disturbing the first charge mortgage.
The solution
Somo provided a £145,000 Second Charge bridging loan over an 18-month term through its Breathing Space product.
The outcome
The completed transaction delivered several key benefits:
Buy-to-let mortgage arrears cleared and accounts brought up to date
Management charges settled and the title restriction removed
Existing first charge mortgage left undisturbed
18 months of breathing space to sell two properties at full market value
A clear, asset-backed route to repaying the loan
Comment
Somo's COO, Jade Keval, said:
"Arrears don't always tell the full story. Here we had experienced landlords with real equity in their portfolio and a sensible plan to sell two properties. What they needed was time, and the arrears were making that time very expensive. By taking a second charge behind a low first charge mortgage, we were able to clear the arrears, deal with the title restriction and give the borrowers the breathing space to sell properly rather than in a rush. That's exactly the kind of situation our second charge lending is designed for."
Are you a landlord who needs a break from monthly repayments?
Speak to the Somo team. We'll assess it on its individual merits and work with you to find a way forward.
