An innovative new buy to let product has come to market that in some cases circumvents the need for using bridging finance to acquire properties that are not mortgage-able.
"Refurbishment buy to lets" have been on the market for a long time but generally they require the property to be mortgage-able on day one, any works required are for improvements only. So for example; a better bathroom can be required to improve the rental generated by the asset and its value but there has to be a bathroom in the property prior to drawdown of the loan - even when the plan is to replace. These products then allow a second draw of monies once the works are performed usually as a percentage of the increase in value.
This new product however is unique because even if the property is not habitable on day one, say it requires new electrics, a bathroom or a kitchen then the product is still available so long as the property can be completed in 3 months and the clients can cover 3 months rental whilst undergoing works.
For very light refurbishments this then precludes the need to use light refurbishment bridging finance instead, allowing the client to go straight into a long term mortgage just with the first 3 months serviced from savings rather than tenant income.
Even better, one of the products available has no early redemption penalties so could in theory be used for a short-term property flip rather than solely for when the client wishes to keep the property as an investment.
Lending Criteria
Product 1: 4.74% 2 year fixed product, 2% arrangement fee,
£695 application / valuation fee, ERC's 3% for first 2 years none thereafter.
Product 2: 5.39% lifetime tracker, 2.5% arrangement fee, £695
application / valuation fee, no ERC's.
Maximum loan to value 75% on day one and the difference between the initial loan and 75% of the refurbished value as a 2nd drawdown if required.
Only available for clients who already have a residential mortgage or a buy-to-let property Only available in England and Wales.
Single tenant properties only.
For more details get in contact.
I joined White Rose Finance following a career as a consultant in developing new financial products and market research for some of the UK’s leading financial institutions, including Legal & General,…
