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Hi Deen and welcome,If you speak to the team at Property Tribes Financial Services on 01206 654444 they will be able to assist you with financing this project.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Good to talk with you just then, and to reiterate our conversation, and for the benefit of other PT readers, my thoughts are as follows;
there is a product proposition, commonly known as 'bridge to let', which enables the purchase of an unmortgageable (or maybe intentionally unoccupied / uninhabitable) property and for the works to be carried out, then when finished for the first stage financing to then subsequently be switched internally to a BTL term finance
standard process is 75% LTV of the purchase price and then up to 80% LTV of the new enhanced value
To qualify, the building must have no more than 6 units, you must have a self employed or employed status and income, you should be an experienced BTLer, and the refurb should not be a full development but a TLC cosmetic and basic refurbishment (new bathroom, new kitchen). Other criteria to be met too.
Other strategies are also available, so, in short, financing for the right proposition is definitely possible.
As always, to progress this sort of enquiry, a Fact Find discussion needs to be carried out with one the Team from https://www.PropertyTribesFinancialServices.com and with all relevant info to hand we can then research the options accordingly.
Hope that helps.
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Re "must be employed or self-employed" - will they take pension and property income into consideration? A likely time for many people to be seeking such a loan is when they have just reached the point of no longer needing to work full-time and have more time available to manage a refurb,
One of the lenders who offer this proposition do indeed allow 100% of pension income and their criteria states;
"There is no minimum income requirement for buy to let applications below £1,000,000.
For loans above £1,000,000 we will require a minimum income of £100,000 from a sole source and proof of income must be provided.
If excess earned income is used to support an application this must be of a sufficient level to meet the applicant’s current commitments as well as any rental shortfall on the property."
Term Mortgage Products do not allow you to undertake any significant renovation. A lick of paint? Is allowed.
You will need a short term loan known as Bridging Finance. You can be on Bridging for as short time as you can manage. Having a team to go in and renovate on day one helps.
You then exit onto a term mortgage. Well, typically you would..
You have another interesting problem, which is a Multi-Unit-Block. Not all lenders lend to multiple flats on one title and some have limits to the number. So you are looking at more specialist lenders.
An additional thing to think about when renovating. Many lenders of MUB's require each unit to have Separate Services and Entrances. They do not like lending, where the flats are on one electric/gas circuit. Unable to be billed directly and invidiualy from utility providers.
We love a bit of MUB's at Bespoke and would be happy to help.
_________________________________________________________________________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._________________________________________________________________________
What maybe a silly question Adam, but would the ownership being under 6 months present a problem moving from bridge to term mortgage? Or the fact that you are the owner, render this annoying issue not relevant.
If it is you would have to factor that into the term for bridging.
Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk
Yes & No - with planning.
The six-month rule is more of guidance, some lenders implement a 3 month, 6 months or 12-month rule.Others dont have any six-month rule but may value the property on the existing purchase (not the new value) or the existing purchase price plus works.Others allow you to exit with them onto term mortgage if you did the bridge mortgage with them.Others allow you to exit if you have evidence you completed works, but not otherwise.
So it's about planning the exit as well as the bridge.
So still as much fun as it was when I left haha