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Case Study

Manual underwriting helps landlord release capital on semi-commercial property

11/10/2024

Specialising in helping businesses secure the right funding to suit their specific circumstances, Coreco Specialist Finance Limited approached Redwood Bank on behalf of the applicant to explore the options available. 

When assessing customer cases, possessing the ability to appraise the nuances of each individual factor is a key distinguisher, and can lead to better outcomes for customers. Thanks to Redwood Bank’s manual underwriting processes, the bank is able to do just that.

A recent example of this comes in the form of a customer, who was having difficulty securing a reasonable rate on the remortgage of a mixed-use property consisting of a commercial unit and two flats.

THE SITUATION

Following the completion of renovation and extension work, the applicants were looking to remortgage their property in order to repay an existing lender and fund future investments.

Held on a single title, the commercial unit and flats had a combined value of £500,000, with the majority of its income generated by the flats. This meant Redwood Bank could offer the customer a residential investment mortgage.

THE SOLUTION

Specialising in helping businesses secure the right funding to suit their specific circumstances, Coreco Specialist Finance Limited approached Redwood Bank on behalf of the applicant to explore the options available.

The property included a convenience store with two flats above and at the rear. The convenience store had a long-term lease and the flats assured shorthold tenancy agreements. Redwood’s manual underwriting team were able to review the lease agreements and the source of rental income to offer terms as a residential investment mortgage.

Treating the case as a residential investment deal provided the customer with far greater value. Redwood was able to offer a more competitive interest rate on a five year fixed term, interest only for 29 years. The customer benefited from lower monthly repayments, which in turn supported their business margins, and greater affordability, to release the capital required to fund future investments.

THE EXPERIENCE

Peter Davies, of Coreco Specialist Finance, said: “My colleague recommended Redwood to me as a specialist lender for semi-commercial deals. Mark and the underwriting team worked with us to find the best solution for our clients. In this case they helped a growing firm to release capital in a cost-efficient way. Their manual underwriting allowed us to agree a deal with a combination of tenancy types. Our clients are delighted with this approach and we look forward to continuing the relationship with Redwood to support them and future clients.”

Mark Dobson, Redwood Head of Business Development (South & London), added: “Redwood consistently supports semi-commercial deals. We help support property investors to release capital allowing them funds to invest in other assets. Our approach helps landlords to maximise their affordability to release the capital they need to grow and to manage their margins with longer interest only terms and access to residential rates on mixed asset types. It was great to work with Peter and the team to see this case through to completion within the timescales as dictated by the customer.”