Buy to Let Capital raising within 6 months of purchase up to 80% LTV of the current open market value.
Have you taken out a short term bridging loan to do up a property? If so you are likely to want to replace this with a traditional mortgage, particularly if you plan to let it, as the interest rate is likely to be lower and the term can be longer.
In this blog, I am going to talk about products that can help you Remortgage of bridging loan within 6 months and work of the current market value.
It is also likely that as well as replace the bridging loan you would want to borrow additional recoup the build costs and perhaps fund a future project. In fact, I receive many enquiries of this nature on a weekly basis.
Most Mortgage Lenders normally like to have a 6 month ownership period before they will consent on a Remortgage of bridging loan but there are of course exceptions and a professional Mortgage Broker, such as Niche Advice can steer you in the right direction.
The real trick is getting a Mortgage Lender to factor in the uplift in valuation since the property was bought and renovated as this may allow you to release more equity.
Case scenario – Remortgage of bridging loan
Jeff bought a house for £350,000 on 1st January using a bridging loan. He needs to carry out works on the kitchen, bathroom, drive, roof and rear extension. He thinks this will take up to 3 months and add £75,000 to the value. He has approached his normal buy-to-let lender who have said he will need to wait 6 to 12 months before they will lend to him.
He called around and was advised that there were Mortgage Lenders that would lend to him at the 3 month point but they would work off the purchase price and not the new property value. This meant the maximum mortgage £262,500 (75% of the purchase price). If however, he had called an expert in the field, such as Niche Advice, he could have potentially got £318,750 (75% of the open market value). Furthermore we can currently arrange mortgages without any main early repayment charges so you would not be tied to keeping the property.
Niche Advice offers suitable remortgage advice on the Remortgage of bridging loan products. To find out if we can help you with your plans please complete the Contact Form on our website or call T: 020 7993 2044.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.