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  • Mortgages & Finance

    Alternative routes to finance?

    I have been trying to Google this one but its a tough one to research.

    Is there and funding groups, groups of investors etc that will lend 75% on property but not have as many regulations as the banks and mainstream lenders?

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    Not enough information.Are you after bridging or long term.What type of property is it .Where is it.What is the value of the property

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    Hi

    There are a lot of non traditional lenders out there. I have invested my money in some. When it comes to money no one's going to lend you money without due diligence and a charge on property or security. Also you have to be careful that you do not brake FCA rules or it could be costly.

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    I have been lending my own money secured for over 30 years and there is no way a borrower is regulated  by the FCA

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    Hi Don

    I'm not an expert. To my understanding some mortgages are FCA  regulated and others are not.

    If I'm a developer and I borrow money from 2 different investors, then I could breach FCA rules if correct procedures aren't followed. Most cases aren't picked up until certain events e.g. investor wanting his money back or compains or death of an investor.

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    That's right Jedina. It used to be simple either residential or commercial but now even some commercial mortgages are regulated after MMR changes.

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    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

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    I hope not Micheal Jarrett - the reason banks & lenders do all the checks is to lower risk of default and follow regulations such as money laundering & know your client (KYC).

    Though the question really lies around what issue you have. As there are some that will be ok with sub-standard properties that you are going to renovate. Some will be ok with a few missed payments or a CCJ (given time. Some will be ok with Ex-Pats or Foreign Nationals and others wont.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Is there and funding groups, groups of investors etc that will lend 75% on property but not have as many regulations as the banks and mainstream lenders?

    I sincerely hope not.  If you cannot borrow money from a bank in the normal way, that suggests you are already a high risk borrower.  So anyone lending outside of mainstream channels should have even stricter criteria in place imho.  Crowdfunding and peer to peer lending are regulated activities, as are pooling private investor funds and offering a profit share.

    If you want to borrow some money from a private individual and offer them an ROI, then that is a private matter between two parties.

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    Hi Vanessa

    Great response.. I would like to add that economic climate is important. After the last crash banks just stopped lending even to great prospects, whereas before the crash it was hard to be turned down for funding.

    Although directly not related to this forum,  some businesses now avoid bank lending and turn to so called "fintech" , peer to peer lending. I have been involved in a number of these projects. Some of these companies have done really well and then turn to larger funding sources such as GET, Private equity funds including banks and very very high net worth individuals. For these businesses alternative funding were often positive choices.

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    Sorry my question s rather vague. it's not about poor credit or affordability. i spoke to Nationwide recently for example and they wont lend on properties below £50K wich being near Burnley in the North West there are actually a lot of opportunities between £30k and £50k.

    I put it too them, "what if i buy 2 or 3 properties at one time that have an acumilitive value of well over £50k but that wouldn't suffice"

    So i came up with a plan that i published on another post witc was to cash buy, renovate then re-mortgage hopefully gaining some equity back..

    E.G.

    buy auction house cash £30k - Renovate £15k - New Value £60k - Remortgage 75% Loan To Value =  £45k

    My overall cost is £45k (less any fees along the way)

    The remortgage refunds all of the money!!


    Problem i have with some of the lenders they want you to own the property for 6 months before they will remortgage. ii could maybe afford to do 2 houses at a time maximum but that will then take years to build a large portfolio.


    Other private lenders might hear me out and release money fast so i can remortgage two properties straight away and move on to the next two.



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