Over the last couple of months my mortgage broker has identified a couple of fantastic products to help accelerate your property progress.
One, a bridge to let product which allows you to refurb a property with a guaranteed switch to a buy to let loan when the refurb is done, and all in one product.
And he’s found a Forward Funding Finance product which means you know you can get up to £5m of finance before you start, guaranteed (but subject to valuation on the individual properties).
If you haven’t seen them I’ll post a couple of short videos below (Quick 1 Minute Views on financing Your Properties) which take you through brief ‘highlights’.
But, I had a great question about the Forward Funding Finance from Graham, who posted on my Property Teacher Facebook Page and asked:
“Thanks Peter. Out of interest, if you know a lender will lend to you (e.g I have 5 with Kent Reliance), is there any advantage of this or am I missing something? It seems like a normal 75% LTV mortgage to me, maybe a little quicker to get the funds but the broker and lender fees are on the higher side”.
So I threw the question at my broker to see what he’d say. Here’s his answer:
The application process for Portfolio landlords is not renowned for being seamless & indeed the provision of a Business Plan, Cashflow projections & updated property portfolio schedule each time an application is made can cause delays to processing which in some cases can drag on for weeks/months dependent on the complexity & the lenders underwriting processing.
These delays can be significant particularly if you are involved in a motivated vendor transaction/auction acquisition and entirely dependent on how quickly & efficiently the lender can process this information. Some lenders are better than others in this respect!
The Forward funding facility removes these obstacles & is an approved credit facility subject only to valuation & legals of the proposed acquisition/remortgage security. The facility is subject to review every 6 months & the means of accessing funding is via a simple “additional property” application form which we submit each time direct to the lender once the facility has been approved.
Broker fees – 0.5% at the outset based on the facility & NIL going forward for acquisitions financed via the facility. Based on my knowledge of broker fee levels this is not by any stretch on the high side & indeed some brokers (particularly in the SE) charge 1% fee minimum in addition to application fees.
Lender fees – these are dependent on product i.e. lower rate = higher fee. There are a number of No lender fee options clients can select via the Forward Funding Facility from 3.45% (fixed for 2 years) or 3.70% (fixed for 5 years) & all products have free valuation & £350 cashback per property.
The Forward Funding facility is not for every Landlord however where the client is wanting certainty of funding going forward it is a product worth considering & has been used to great effect by clients when negotiating with Agents/motivated Vendors.
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So, if you’d like more information about the bridge to let, or the Forward Funding Finance OR if you’d just like help from a good reliable broker who can help you to get your finance, please email me
thepropertyteacher@gmail.com
and I’ll put you in touch with my mortgage broker.
By the way I often get asked what a good LTV is to have across a portfolio so I give my thoughts in the video.
I go through it all in the video (it’s less than 4 mins so grab a cuppa : ) )
Here’s to successful property investing.
Peter Jones
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
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:
www.thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop