Best mortages for property developing

wormy73

I'm currentyl looking at mortgages for a flat i have had an offer accepted on (flat is 90K). My intention is to sell it on quickly after a basic refurb making a small profit of around 10k. I can meet the required 25% deposit but am finding that many of the BTL lenders have excessive arrangement or exit fees, which will eat into my profit.

Does anybody know of any lenders at the moment who are not going to penalise me for ending the mortgage early or any lenders that they can recommend that specialise in mortgages that would suit a development property like this?

Regards,

Andrew

Fire_Fox

Have you been to see a mortgage broker?

BitterAndTwisted

Why have you made an offer for a property you don't have a mortgage lined up for?

Please be aware that there are a fair few experienced, professional property developers who are taking a bath at the moment and there's not much margin for error with only a potential £10k profit in it, especially for an amateur doing the developing. You'll be taking a double-bath if prices dive again and interest-rates go up

googler

Are you hoping to sell within 6 months of buying it?

Good Luck with that.

I'll find the appropriate threads, and post again here soon.....

googler

http://forums.moneysavingexpert.com/showthread.html?t=2135311&highlight=money+laundering+six+months

wormy73

I have a mortgage broker who was able to rubber stamp a mortgage prior to making the offer.I have seen her again today and was offered a choice of BTL mortgages, all off which carry penalties either to set up or exit early.

The flat is a repo and requires a very very basic refurb and the idea is to sell within 2-3 weeks. I live in a flat which i bought as a repo in the block next door 10 months ago so I know the area well and the potential to make the projected £10k.

Doozergirl

You are using a broker - is she whole of market? That will help, obviously.

When we had mortgages on renovation properties we would pretty much ignore the interest rate and specifically look for those with no exit penalty - you will never escape admin charges. Average the cost of the interest payments and the admin fees over the period you expect to own the property for to work out which is cheapest for your needs.

No doubt it's more expensive than it used to be.

Do you need to have a BTL? Do you have the salary multiples for another residential mortgage if you already have one on your own home?

LaDiva_2

Sorry to thread jack, but instead of starting a new thread I assume that based on the experience of the seasonal developers that the next 6 months won't be a good time to go into property development for the first time?

I actually thought 10k profit was a nice little cheque-or am I missing something?

Doozergirl

LaDiva wrote: »

Sorry to thread jack, but instead of starting a new thread I assume that based on the experience of the seasonal developers that the next 6 months won't be a good time to go into property development for the first time?

I actually thought 10k profit was a nice little cheque-or am I missing something?

It's risky with budgets. As soon as you find something you hadn't accounted for it's been eaten away. Plus it gives you no margin for error on your projected sale price - which will move with the market either up or down.

I wouldn't choose anything with that small a margin even if the projected sell-on price was five figures. If you look harder and try harder you can find better than that. If you're buying for six figures then I wouldn't even consider it.

Where are you looking at buying LaDiva?