9:01 AM, 26th March 2013, About 13 years ago 2
Text Size
Categories:
New commercial finance facilities are offering the option to switch bridging finance to a BuytoLet mortgage within the normal 6 months period other lenders require you to wait.
Borrowers are now able to bridge 70% of initial purchase price and then, within six months, switch to a BuytoLet remortgage based on 70% of the ” new, higher valuation figure.
The best available product is 0.69% per month for the bridging finance and then 4.7% plus Libor for the Buy to Let term facility.
Example case below:
Finance required for a renovation property purchase price of £65,250.
After works value approx £115,000 to £125,000.
Cost of works approx £10,000 renovation timescale 4 to 6 weeks”.
The Plan was to secure funding for 70% of the purchase price with the choice to either re-finance straight away (ie without the usual 6 month restriction) at 70% of the new Loan to Value or sell without penalty which would then realise the profit.
The deal found:
Interest Rates = 0.69% per month for the first 6 weeks then 4.7% plus Libor for the Buy to Let term facility.
Fees – 1.95% lenders arrangement fee for the purchase, then just 1% to switch onto the Buy to Let term facility.
There is no exit fee for the initial finance which was used to purchase the property. When the finance is switched to the agreed Buy to Let facility only from then onwards is there an early repayment charge of 3%
Summary
Original purchase price = £65,250 (inc deposit invested) + £10,000 (for works) = £75,250
New value = £120,000
Therefore, £120,000 – £75,250 – £5k underlying costs = 39,750 Gross achieved profit (in addition to full rebate of the £29,575 of initial personal outlay)
All this was achieved in 6 weeks proving that specialist Commercial and Bridging finance still has lenders willing and able to lend.
To discuss any Bridging finance with our preferred commercial finance broker please use the relevant links below, call us on 01603 489118 or email [email protected]
For Bridging finance please click here.
If you would like to add your own requirements and search for the most popular available Buy to Let products please click here
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
Housing jargon explained by the NAEANext Article
Am I missing a trick by owning my own property?
Stephen Pears - Mortgage Consultant HD Consultants
You're Missing Out!
Members can reply to discussions, connect with experienced landlords, and access full member profiles showing years of expertise. Don't stay on the sidelines - join the UK's most active landlord community today.
Not a member yet? Join In Seconds
Login with
Member Since September 2013 - Comments: 9
15:50 PM, 15th March 2013, About 13 years ago
I can vouch for the original poster as I am currently doing the same and it would appear to be some lender as details provided in example are the same as what I am using
Howard Reuben - mortgage and insurance broker
Read Full Bio
You're Missing Out!
Members can reply to discussions, connect with experienced landlords, and access full member profiles showing years of expertise. Don't stay on the sidelines - join the UK's most active landlord community today.
Not a member yet? Join In Seconds
Login with
Member Since June 2013 - Comments: 373 - Articles: 61
9:10 AM, 13th July 2013, About 13 years ago
Yes, this product is becoming more and more popular with savvy investors.
The latest deal we arranged was for a BTL’er who sourced a property in Bristol, and secured it for approx £165k, recent sold comparables at £190k+. In fact, with a small bit of refurb this could now be worth £215k’ish.
Options? 1) sell on immediately for a cash profit, or 2) keep, refinance the short term lending on to a BTL and remove bridge and original deposit, and add to portfolio.
Win, win???