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Where to find Short Term Finance for Home Development?
MoneySavingTyro
Posts: 4 Newbie
Hi all
New to Forum, and hope you can help - just can't find what I need on the net.....
We have a very nice house and land, with a £110k mortgage balance (c. 16% LTV). We need short-term finance of a further £320k, on interest-only, to carry out major developments (est. will take one year), and then immediately put it on the market and relocate. We can fund the likely interest (don't want roll-up), but the Lender's only exit route is sale of the property. (Our income is modest.) Of course we cannot know how long it might take to sell, but can fund interest from demonstrable savings for a long time if necessary. Our guesstimate is that we would want the loan for no more than c. 18-20 months. We assume that we will also transfer the current £110k mortgage balance to the Lender as part of a new First Charge loan, so there will be a total loan (excluding interest) of £430k to repay. Guideline end sale value is c. £1.3-1.4m. Naturally wish to avoid intermediary fees if possible. Can anybody recommend a source of finance? Sincere thanks to all.
New to Forum, and hope you can help - just can't find what I need on the net.....
We have a very nice house and land, with a £110k mortgage balance (c. 16% LTV). We need short-term finance of a further £320k, on interest-only, to carry out major developments (est. will take one year), and then immediately put it on the market and relocate. We can fund the likely interest (don't want roll-up), but the Lender's only exit route is sale of the property. (Our income is modest.) Of course we cannot know how long it might take to sell, but can fund interest from demonstrable savings for a long time if necessary. Our guesstimate is that we would want the loan for no more than c. 18-20 months. We assume that we will also transfer the current £110k mortgage balance to the Lender as part of a new First Charge loan, so there will be a total loan (excluding interest) of £430k to repay. Guideline end sale value is c. £1.3-1.4m. Naturally wish to avoid intermediary fees if possible. Can anybody recommend a source of finance? Sincere thanks to all.
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Comments
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What is the property worth as it stands?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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£725K (Agent valuation).0
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MoneySavingTyro wrote: »Naturally wish to avoid intermediary fees if possible. Can anybody recommend a source of finance?
What a cheapskate. Rather rely on the dubious information sometimes provided on this forum than pay an experienced broker/adviser to source the necessary finance.0 -
Your income cannot be 'too modest' to cover the borrowing.
How 'modest' is it?I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
As a newcomer, just a little self-defence - I've joined this Forum largely because it seems to be called "MoneySavingExpert". That's as in 'trying to save money', right?0
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Is your income sufficient to service interest on a development loan of £320k ? That's your stumbling block.
There's no possibility of borrowing at mortgage interest rates for such a project.0 -
Hi there Thrugelmir - interest payments can readily be met from demonstrable savings, not from income. Certainly appreciate that regular mortgages are not a viable route. Will need to find a specialist provider for this type of finance. Many thanks.0
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Good grief if you kicked all the cheapskates off the site there'd be no one left.0
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