Temporary loan to buy

jonnym2

Hello

I'm looking for some advise regarding a temporary loan to buy a property. We own a flat which we have a buy to let mortgage agreed in principal.

We are trying to buy an old chapel without change of use planning. We need around £200000 to buy it.

We will then apply for change of use and get a self build mortgage.

We can raise around £150000, due to the buytolet mortgage releasing some cash and begging and borrowing from familly.

We will have the pre-planning approval in place and agreed before needing the loan or agreeing purchase.

I'm struggling to find away of raising the £50,000 short fall. Could any of you help with some advise?

We would need £50000, for around three months.

Thanks for any help

Jonnym2

Thrugelmir

jonnym2 wrote: »

We would need £50000, for around three months.

As you've remortgaged your existing property already. What security can you offer a lender?

How do you intend funding the conversion?

Conrad

You need specialist finance from the likes of C&D, but the rates are horrendus at something like 25%. The reason for the high rate is they know you will only remain with them temporarily. Thier fees will be at least £6000. The idea is to then subsequently remortgage using an ordinary lender once the property meets standard criteria.

jonnym2

The conversion will be funded using a self build mortgage. We have check the figures with lenders and they seem to be agreeable.

The security would be a problem. We would still have more than £50000 equity in the flat we would let. We were hoping to use the security of the chapel. I realise that is a problem as we don't own it yet, hence the request for advise.

thanks

Jonnym

jonnym2

Who is C&D? Worth looking into, we expected something in the region of £10000 for 3 months

Wh05apk

You might find speaking to your bank, they may be able to do a secured loan on the new property, their rates will be far more reasonable than "specialist" lenders.

jonnym2

Thanks I will book a face to face meeting with the bank.

But could anybody suggest some specialist lenders I can contact at the same time? It does no harm to cover all bases.

thanks

Jonnym2

jonnym2

The conversion will be funded using a self build mortgage. We have check the figures with lenders and they seem to be agreeable.

The security would be a problem. We would still have more than £50000 equity in the flat we would let. We were hoping to use the security of the chapel. I realise that is a problem as we don't own it yet, hence the request for advise.

thanks

Jonnym

Thrugelmir

jonnym2 wrote: »

I realise that is a problem as we don't own it yet,

Nor do you have permission for change of use.

jonnym2

Looking good at the moment. Ive found two specialist lenders willing to lend and the meeting with my bank went very well, they offered me £25000 on the spot at reasonable rate, the maximum he could lend at his level and I have arranged to see a personal manager who can offer more. Hopfully the full £50000, I will have to wait and see. So not a bleak as I was led to belive

jonnym2

Thrugelmir wrote: »

Nor do you have permission for change of use.

Correct as pointed out earlier. However the buildings value does not rely soley on its planning permission.