Choosing the right route for property-backed funding

Illustrative case note: This is a composite of common funding situations and is not a recommendation relating to any identified borrower or property.

The situation

A borrower required additional funds and owned an eligible property that was already mortgaged. Several routes appeared possible: a fresh Loan Against Property, a balance transfer with enhancement, or a top-up from the existing lender.

Comparing only the interest rate would not reveal which option best suited the actual requirement.

What required comparison

• Purpose and acceptable end use of the funds
• Property eligibility, valuation and available security cover
• Outstanding loan and the actual net amount available after closure
• Interest rate, tenure and resulting instalment
• Processing, legal, valuation, insurance and other charges
• Prepayment conditions and future flexibility
• Time and documentation required for execution

Look beyond the headline rate

A lower rate may be offset by a shorter tenure, higher instalment, transfer expenses or restrictive terms. Conversely, retaining the existing facility may be simpler but may not provide sufficient funds or a suitable repayment structure.

The preferred route should match the borrower’s repayment capacity and purpose while keeping the total borrowing cost and execution requirements visible.

How KSV adds value

KSV can help compare the available structures on a like-for-like basis, estimate net proceeds, review repayment affordability, organise documentation and coordinate with suitable lenders.

The aim is to help the borrower understand the complete transaction before committing the property and accepting the sanction terms.