Case Study – 100% funding – Full transparency

by Howard Reuben CeMap CeRER

12:03 PM, 5th October 2013
About 7 years ago

Case Study – 100% funding – Full transparency

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Case Study – 100% funding – Full transparency

Case Study - No Money Down - Full transparency

We’ve all heard of those ‘no money down’ schemes (mortgage fraud scams) where a ‘property sourcer’ has negotiated a discount and the buyer and his friendly mortgage salesman gets a mortgage based on the normal market value.  Many were very active in this market, some still are, however ……

….. what is not so widely reported – mainly because the shrewd investors who use the following strategy don’t normally shout about it – is the ‘cross charging’ 100% capital raising process which allows for the full purchase price, refurbishment costs and subsequent buy to let remortgage (if keeping the property) all to be arranged in a transparent and legal process, often all with the same lender.

How do I know about this?

Because we’re doing it, and I have a case study to share with you …

Case Study for a 1st and 2nd Charge combined arrangement

Our client required a deal they couldn’t get via their usual high street lender. He was looking to buy a property, renovate and then take out a BTL based on its new and improved value.

Crucially, and the main issue that nearly caused him to lose this opportunity, is that he was also limited in the cash required to secure this deal, although he had a good level of equity in his main residence.

Our client ideally needed to borrow 100% of the purchase price and 100% of the renovation costs using the equity in his home as additional security. Once renovated he wanted a quick solution in changing the bridging loan into a BTL.

  • Our client owned his residential property with a value of £600k
  • Mortgage outstanding £300k with Halifax
  • Purchase price of the property currently worth £150k
  • Refurbish costs £40,000 – Renovation including new kitchen and bathroom
  • Total borrowing required £190k

The solution?

First, to borrow 75% of the new purchase which gave him £112.5k

Second, the shortfall of £37.5k towards the purchase and the additional £40k needed for the renovation works (£77,500 in total) was raised by adding in the additional security via a 2nd charge on the main residence.

He was actually offered a 2nd charge bridge on his residential property up to 70% LTV, which meant he could, if he wanted to, raise up to £120k from this property (70% = £420k, his existing mortgage is £300k), far more than enough to make up the required difference (£77,500) to cover the full 100% of the purchase and 100% of the renovation costs.

The valuer was booked to attend the property within 72 hours.  In the meantime our client was quick in supplying the shopping list of requirements required and forunately instructed a solicitor who understood the speed required for a bridging loan. The deal was completed within a few weeks enabling our client to ‘do up’ his new property, increasing the value to £300k.

Three months later our client was able to change the bridging loan product to the lenders BTL product, releasing 75% of its new improved value. This released £225,000, enough to pay off the bridging loan and put some money back into his cash flow.

This is the intelligent, new improved, ‘no money down’ style of investing and refurbishing which is helping many savvy investors to add property to their portfolio without laying out any of their own liquid cash.  Instead, they are letting their own existing bricks and mortar do that for them.

We are now very closely associated with a leading and award winning bridging loan / short term lending packager who specialise in these cases.

We have a very simple enquiry / AIP process and as highlighted above, cases can be processed very quickly indeed.  In this case, after 12 weeks of work, our client ended up with another property in his portfolio and also approximately £20k in cash (after fees etc) as well.

Could this be of interest to you?

Contact Howard Reuben

Mortgages, Commercial and Bridging Finance, Life Insurance, Wills, Trusts and LPA's
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Mick Roberts

12:05 PM, 6th October 2013
About 7 years ago

New? I was doing this 15 years ago. But I suppose for those that don’t know, it opens their eyes up. I always recommend to mates, if they have equity in their house & ONLY IF THEY ARE DISCIPLINED to get flexible chequebook mortgage (or whatever they are called nowadays) on their own house.
This helps u buy the house quicker because u r buying cash.U bargain better because u can buy quicker. And u can if u buy right, normally always get your money back or more. To me it ain’t rocket science, but the newbies can’t get their head round it.
It was only when I was putting 5k deposits down on houses that I thought ‘Hang on, I could run out of money soon’. So for those that don’t know, if u can get the initial money (I’m giving figures when I was buying houses-Although I have the body of a 20 year old, so don’t start calling me old timers will u), pay 20k for the house, 2k doing it up. value of 30k, re-mortgage of 22.5k, u get ALL your money back.
This was in the days when u could re-mortgage 1 month later (Shut up showing your age Mick), now it’s 6-12 months later. And so on.
I tell u story & 100% not a lie- I bought for 43.5k I think (Always cash), I was that fast in them days that I’d be sending the mortgage form as I was buying it, so as soon as it was mine, the valuer would be about ringing me, but on this occasion, I had the valuer round before it was even mine (I knew the vendor), my solicitor had the FUNDS I think it was about 52.5k (value 70k 75% mortgage), before I’d even paid out the 43.5k, she din’t know what day it was-And this was when as Mark will know that lenders were chucking money at u. I’m not gonna get into legality on it, it was unusual, but I’m not gonna refuse free funds. If Mark asks me privately, I’ll even tell him which lender it was.

Ooh Vanessa, u like a rant don’t u. I do like your style about chilling with the cats though. I’m same, got to have massive luxury time nowadays. Phone silent upside down after 6pm. I’m even selling some houses should anyone want to buy any. Approx 58k, values 70, rents approx 5-6k pa. 10%ish.

HB Welcome

12:45 PM, 6th October 2013
About 7 years ago

Reply to the comment left by "Mick Roberts" at "06/10/2013 - 12:05":

Ay, them were t'days Mick lad.

I remember when tha cud goo art wi 50 grand worth o' zero/low rate credit cards, buy t' house, sup ten pints and still have enough for a bag o chips on t' way ome.

Mind, gooin back even further, it were all fields round ere when I were a lad...

And I'm still paying the minimum off a 10 grand card at 2% APR for the lifetime of the balance. Bless those greedy bankers.

HB Welcome

13:21 PM, 6th October 2013
About 7 years ago

20k for an house?

Adam Hosker

15:46 PM, 6th October 2013
About 7 years ago

Reply to the comment left by "Mark Alexander" at "06/10/2013 - 08:18":

That's right mark "shared appreciation" on residential only at the minute. The lender we have trained three of our financial advisers with is CastleTrust.

Their is a good Sky News interview here -

Limited Distribution to Advisors/Networks were lucky we choose to be part of a progressive Mortgage Network to offer these kind of products.

Feel free to refer Enquiries to Bespoke Finance for commission, but the CT website also refers cases back to Advisers nationwide whom may offer similar referrals.

Mark Alexander

19:23 PM, 6th October 2013
About 7 years ago

I am impressed Adam, well done!

The old style capital appreciation mortgages were far more complicated than this and many felt they were unfair. The fact that such a product has been launched now demonstrates strong faith in the future of the UK property market.

Do you think it will become available for BTL and do you see any issues with the first charge lenders refusing to accept second charges?

As you may be aware, the founders of Property118 also own a company called The Money Centre. We may be interested in working with you to promote this product. We have a board meeting at 8am tomorrow morning and I will raise this as AOB. Do you have and further information you could email to me please? My email address is

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