Bridgebank capital are unique in advertising they will lend on Open Market Value

Bridgebank capital are unique in advertising they will lend on Open Market Value

10:12 AM, 12th September 2014, About 10 years ago 1

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Open Market ValueBridgebank capital are a Bridging loan lender fully regulated by the FCA and uniquely advertise they will lend against the open market value (OMV) of a property rather than the lower of purchase price or value.

They are targeting landlords/investors/property traders who may be purchasing at auction, repossessed, distressed sales or bulk discounts.

The maximum Loan to Value (LTV) is 65% of the OMV with rates at 0.85% pcm up to 55% LTV and 0.95% pcm up to 65% LTV. Maximum term is up to 12 months.

An example below actually given by Bridgebank to shows where lending against Value rather than purchase price provides a profit for minimal investment:

Landlord / property trader secures a purchase price of £130,000 (65%LTV of OMV £200,000). Maximum loan available of £130,000 at 0.95% fixed for the term. The investor then owns property for 6 months, and then either refinances on to a traditional BTL, or sells and realises equity profit. Even if the purchase price was not as low as 65% of the value, comparing loan options against other lenders who only lend against purchase price, this arrangement can offer better value cashflow modelling due to OMV lending.

Each Loan is underwritten manually based on its merits, but the basic criteria below includes:

  • No Upper Lending Limit on either loan size or portfolio size
  • Daily Interest Rates
  • No Exit Fees
  • Status only product – homeowners, proven income/employment
  • Equifax credit score in excess of 350
  • No impaired credit history in last 24 months
  • Residential Buy to Let Investment property (single units and portfolios)
  • Light refurbishment only (excludes conversions, structural remodeling cases)
  • England, Scotland, Wales within 1 hour commute of major city conurbations
  • Individuals & corporates (with PGs)
  • Excludes HMO’s
  • No upfront lenders processing fees
  • Minimum loan of £125,000 (however possibly may consider lower amounts for the ‘right’ deal)
  • All security must be classed as readily mortgageable or marketable
  • Excludes mixed use property with any commercial element
  • Purchase and re-mortgage
  • Transparent, arms length purchases with no complex scenarios
  • First time BTL’ers welcome.

One of the criteria that caught my eye above is the minimum credit score of only 350 which is quite low for a loan application.

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Howard Reuben Cert CII (MP) CeRER

10:06 AM, 15th September 2014, About 10 years ago

As far as I understand this product, it is not a 'something for nothing' deal, nor a financial product for the amateur or feint-hearted.

For those professional property traders who successfully negotiate 35% discount, then 65%LTV can be a no-deposit-deal. The lender does allow this (most will work to LTP i.e. 'purchase', rather than LTV 'value') so having a lender who works with property investors on a LTV basis irrespective of purchase price is very welcome at this time.

Their pay rates rates are less than 1%pm and the arrangement fees are in line with everyone else, so this does make the proposition very attractive.

For traders who flip, this can be a quick profit turnaround, for BTL'ers, then as long as the investor can keep the property for 6 months or so then the majority of the BTL mortgage marketplace should help with the refinance 'exit strategy' too.

Nice one, Neil!

ps - this deal is also available in Scotland (for now .....) 🙂

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