A property owner facing default fees on an expiring bridging loan avoided a forced sale after specialist lender Somo completed a second charge refinance within 10 working days, using an equitable charge arrangement to get the deal over the line.
The borrower approached Somo needing to refinance an existing bridging loan that was due to exceed its term within 10 working days. Missing that deadline would have triggered additional default fees and interest, potentially pushing the overall borrowing requirement beyond reach and leaving the borrower with little choice but to sell the property quickly rather than wait for the right offer.
Somo structured the loan at 70% LTV of open market value, priced at 0.95% per month on its Classic Bridging product. A second charge added its own complication: the existing first charge lender had a reputation for taking time to provide consent for second charge lending.
To avoid losing time, Somo instructed the solicitor and valuer as soon as the case reached underwriting. The valuation inspection and report were completed within four working days. Legal enquiries progressed in parallel, leaving one outstanding issue: formal consent from the first charge mortgage provider.
Rather than allow that to hold up completion, Somo contacted the first charge lender directly and confirmed that consent would follow once their internal process concluded. With that assurance secured, Somo agreed to proceed on an equitable charge basis, with the borrower’s solicitor undertaking to upgrade the charge once formal consent was received.
The refinance completed within the borrower’s deadline. Somo also held the originally agreed 0.95% monthly rate despite completing on an equitable charge, rather than a registered second charge, basis. The borrower now has a 12-month term in which to market the property and pursue the strongest available offer.
“Ten working days is a tight turnaround for any refinance, but speed is about more than just moving quickly, decisions need to be made fast too,” said Joe Cash, senior underwriter at Somo (pictured).
“We got the valuation and legals underway immediately, as always stayed close to the case throughout and when first charge consent threatened to slow things down, we found a sensible way forward.”
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