I have some fantastic news!
Are you fed up of having to wait 6 months between buying a property and then refinancing after the refurb?
What if the refurb is finished in 3 months?
Wouldn’t it be great to be able to refinance and get on with the next deal?
But the lenders stick to the 6 Month Rule and you can’t move on for 3 months.
Well now you can refinance before 6 months is up!.
I’m delighted to announce a Day 1 B2L Remortgaging buy to let product available via a mainstream buy to let lender (they have competitive B2L for Ltd Co products) – assuming property acquired has undergone a refurb (and this can be modest) they will consider up to 75% LTV of the enhanced value from Day 1.
A Schedule of costs (I have a template) will need to be provided along with bank statements evidencing costs being paid to validate works, but this is encouraging news in that we no longer have to wait 6 months to submit a remortgage application to a lender that will offer competitive terms to both Portfolio & Non-Portfolio Landlords.
This product is aimed at refinancing Bridging & Cash purchases – and is not available to initial purchases.
But that’s ok. it means we can finance properties that need too much work to qualify for a standard buy to let by using cash or bridging, and then have an exit, WITHIN 6 MONTHS, on to a standard buy to let when the work is done.
If you’d like me to put you in touch with my mortgage broker to discuss whether this will work for you, please email me:
thepropertyteacher@gmail.com
Here are the main terms:
BTL Remortgage within 6 months of purchase – 75% LTV Max
In Personal or SPV Ltd Co name (SPV subsidiaries of trading companies accepted)
New open market value considered where property has been renovated
Available on our standard products which include free valuation (see attached)
Please note:
Client must be noted on land reg before case can be offered
70% LTV is applied to HMO purchases within 12 months
Breakdown of costs for renovations must be disclosed for consideration of open market value
£299 application fee per property is applied and is non-refundable.
Now, I have to be honest, when my very good broker told me about this, I was a bit worried about the condition around the provision of a schedule of works and costs.
You and I both know it’s possible (in fact routine) to add more value than we spend.
But if the valuer knows how much we’ve spent, won’t he valuer just add the costs of the works to the purchase price? And say that’s the new, enhanced value? (By the way, that’s not how properties are valued, but who knows where this could lead).
So I said this to my very good broker and here’s what he said:
“The Valuer will be asked to value the property in line with market values i.e. the Valuer has comparables to evidence & support this figure.
Ultimately, as with any mortgage application, the lender will be guided by the Valuation report & comments – assuming there are comparable properties sold recently to justify an uplift in value then the Valuer should estimate value in line with market values , AND NOT just on the original purchase price + cost of refurb.
But there will of course be negative & positive Valuers out there who will buck the trend!
The key thing is to have on file evidence of comparables to justify any subsequent appeal in the event of down valuation.”
So there we have it.
It should all be fine.
It’s certainly well worth looking at if you have a refurb you want to finance within 6 months.
If you’d like me to put you in touch with my mortgage broker to discuss whether this will work for you, please email me:
thepropertyteacher@gmail.com
Here’s to Successful Property Investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://www.ThePropertyTeacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop