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  • Mortgages & Finance

    Forward Funding for portfolio build/refinance

    Its been a busy couple of weeks in the Property Tribes Financial Services offices but I've taken a few minutes out to write this summary of a Forward Funding Facility as I said I would. 
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    If the lender offers this facility, they can underwrite professional portfolio landlords to include their future plans and provide them with a facility letter to cater for those needs.

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    The result being that future transactions can be processed with the minimum of delay, thereby placing the landlord in a stronger position in any negotiations.

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    The facility, which costs nothing to set up, helps reduce uncertainty, for instance where transaction time is sensitive such as bidding at an auction or where negotiating an early completion date. It increases the opportunity for repeat business to be written on a simplified basis. Funds may be used to finance purchases for portfolio expansion, remortgaging property to the lender and for releasing equity on property already mortgaged to the lender.

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    The professional portfolio landlord benefits from an abbreviated subsequent property application form which helps reduce the level of information required. They have already underwritten you, they do not need to do this every time.

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    Once the facility is agreed, a facility terms letter detailing the amount available and the validity period will be sent to the landlord.

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    If for example, you wanted to move the whole portfolio to this same lender with the same products (subject to LTV) for the whole portfolio, you can put in one property for application and then once that has been agreed, send in the application for funding with a copy of your spreadsheet and they will agree all properties at the same time. This saves valuable time when you are doing a large refinance.

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    All they require then is the valuation to come back positively.

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    Or maybe you would like to know how much you could effectively spend at an auction or while building the portfolio up. If they have already told you the amount they will lend, you know how much you can spend!

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    What do you think? Open for questions. Smile

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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209

    I think there is a huge gap in the market for a company to offer landlords with a healthy portfolio the opportunity to move all their properties when they come out of their deals so eventually all the portfolio is with them and say a ltv of 70% with a good rate ( would have to be good enough to equal if not better existing ) then so long as the 70% is not exceeded then the landlord would have a hunting fund for as and when good deals come up there’s enough security for the mortgage company and landlords can get on making deals instead of having to jump through hoops that keep changing 
    alan paul

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    Exactly, well technically the gap is filled!
    Plus certain lenders will go up to 85% ltv if it's a good condition property. 

    Personally I think it's a great idea and having used the facility for a client, it's a very streamlined process.
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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209

    I will soon have a fund for new purchases and would like to optimise the scope. For example, as a starter, I may be able to buy something with a 75% deposit, and an existing tenant producing £1200 pm, and buy a property requiring work which I will either sell or offer as a holiday let. I plan to continue finding properties requiring work in the same area. Is this the sort of thing you could help with?

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    Drop me an email so we can arrange a chat about your plans Smile
    Austyn@ptfs.co.uk
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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209