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I am buying 2 properties at £245k ( value £325k) and £425k (value £575k) into a llimited company.
I would like to bridge these 2 properties. Can I do it at 100% bridging as the LTV will be 75%?
I then would like to mortgage these properties. What value would the mortgage company consider the buy price to be?
Do I have to wait 6 months to mortgage these properties?
How much you can borrow to buy them on a bridge(s) depends on a lot more factors than you have outlined above.....
No you won't have to wait six months - the 'six month rule' doesn't really exist there are lenders that will lend to you much earlier but again how much they will lend will depend on a lot more than purely LTV figures.
If I can help any more please don't hesitate to contact me.
Broker 25 years, Investor 20
"the 'six month rule' doesn't really exist"Please don't say that Robert - some of leading LTD Co BTL products all have a form of six month rule in place.Some may consider it, some may consider if not bought cash, some may base new value on PP, some may base new value on PP+Works and some may base new value on OMV.
Whatever the form of the six month rule - it still plays a vital part and can limit lending options. The six month rule exists.
_________________________________________________________________________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._________________________________________________________________________
Adam my point is it's not a 'rule' per se..if it were it would be set in stone and not open to so many different interpretations and differences in criteria....it making no difference to some lenders...we all have to drive on the left, that is a rule! So I guess we'll have to agree to disagree here.
You want to buy properties with no deposit in a Limited Company? As you are buying the properties below market value.You wont find many short-term bridgers willing to do this. A rather silly private brider maybe but nothing mainstream.Thereafter you will have major issues with the exit on to a term mortgage, conving the lender/valuer that the property has gained £100k in value by you owning it.
I would love to hear why you would consider a private bridger 'silly'.......??
You can bridge but it won't be at 100% value, it will be at purchase value which is where the problem sits. Have you bought off of plan? Lenders don’t like to lend and end value but off purchase value so it means that you will need a larger of deposit to go alongside a bridge.
The John Charcol Team
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We recently heard of a Bridging Company that will lend 80% of value, rather than purchase price. The devil is in the detail I suppose, but if the cap fits, it could be one for you Hattie916. There may be other criteria that would not make it viable, but if you'd like to consider it, please give us a call.
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There are bridging products out there that lend on value but my personal experience is that the surveyors are far more cautious these days and even if they thought the value was around the levels you state, they generally wouldn't recommend this to a bridge lender - its what got the banks in so much trouble back in 2007-2008 so they generally don't do the high LTV on day one anymore - that said if your vals are cautious, not new build, there's a really good reason (parent discount etc) then there might be a way (i'm not a broker).
Like has been suggested by previous brokers - I'm sure there's other factors that might prevent lending like are they new build? are they flats above shops? is there an issue with area/road? The market rent will play a very large factor too, if rent not high enough you won't get the LTV you want within 6mths or even after.
lastly perhaps the 1-3 lenders that might lend on value within 6mths are quite likely to charge for the privilage in fees, rates, penalties etc especially if in ltd comp vehicle.
best of luck
if you can't get the finance you need you could always sell at least 1, release the profits (capital tied up) and pay a bit of tax?
regards Andrew Peers - property investor / sourcer - 07912674181
Property Redress Scheme Number 011436 NLA member 174404