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  • Mortgages & Finance

    Anyone used Light Refurb BTL Mortgage?

    Hi,

    Has anybody used a light refurb to BTL mortgage product like the one Precise currently have. It's a mortgage wherby they will provide finance to purchase the house similar to a bridging loan and also assess the value of the house post refurb and offer a BTL mortgsge to exit on to once work is completed.

    Has anybody used this product and do you have an example of a house you used it on.?

    The main advantage I see is being able to get a bridging loan initially and being able to secure a BTL loan at the end of the refurb from day one. This can also be an advantage if you are wanting to refinance within a couple of months rather than having to wait 6 months with another lender. Thus enabling you to get more projects done in a shorter timeframe.

    What are you thoughts?


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    Its a great product if it suits your circumstances.  Whats better than having the full plan laid out in front of you so you know all the cost's before you start. The bridge exit strategy is very important as you no doubt already know.

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    Financial Consultant working with Property Tribes Financial Services.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk

    We place business with Precise Mortgages regularly and are familiar with this product.

    Certainly on the face of it, there's a good case for using it, primarily the certainty of getting a decently low rate BTL loan at the end of it and reduced fees along the way. However...

    1. The post-refurb value can sometimes be not as high as you might get elsewhere, so the maximum loan will be reduced
    2. Precise's rates are good for Ltd Cos/HMOs but not so competitive for single family dwellings/individual borrowing
    3. It's 'light refurb' only, so no change of use/PD/planning/internal reconfiguration/extension allowed thus limiting the value you can add
    4. The '6 month rule' is ignored by a number of lenders, especially where the property is being refurbished

    Don't get me wrong; it's a great product for the right circumstances and if it fits your situation (Ltd Co application and only minor refurbishment), then it works well.

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    Thanks for the insight.
    I had  look at their rates and yes they are ok at best nothing special. Have you had experience with down valuations, do you think this is due to the lender trying to be extra careful and taking into account the current market. Their BTL offer is valid for 6 months so I guess they have to predict the market in the near future which is not an easy job at the moment. 

    I don't think the benefit is that great if there are many lenders that offer refinance within 6 months. Do you have a list of those lenders and do they offer competitive rates?


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