Somo provides £145,000 second-charge bridging loan for portfolio landlords

Somo has completed a £145,000 second-charge bridging loan for a pair of portfolio landlords.

The facility will allow them to clear mortgage arrears across several BTL 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 borrowers, who jointly own a small residential property portfolio, had fallen behind on mortgage payments across several of their BTL 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.

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.

Somo's COO, Jade Keval (pictured above), 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.”