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BTL Remortgage after 3 months
bigsamih
Posts: 13 Forumite
Hi guys,
New on here so go easy on me!
I've seen a property I want to buy which isn't mortgageable in its current state. I've only ever bought a 'normal' habitable house before. This one is a mess at present but will only take 2-3 months to complete. I spoke to a person on the phone the other day about bridging finance and was then told that after the works are done I could remortgage to pay the loan back and some extra funds on top and this could be done "anytime". In other words remortgage it up to 75% LTV thereafter (to repay the cash im putting in as a deposit and for the works to be completed)
I happened to bump into a mate who seems to know about mortgages etc. and he advised me to tread with caution in terms of the remortgage after the works are done because normally you have to wait at least 6 months before it can be remortgaged. He said that almost all lenders insist on this and that a lot of them will only lend up to 75% of the purchase price, NOT the new valuation. If this is the case the money I have saved could be tied up for a long time.
Anybody with experience of this? Is my mate talking sense or is the bridging finance person telling the truth about being able to remortgage? What firms would do a remortgage based on the higher valuation before (or after) 6 months?
thanks for your help in advance.
in terms of numbers, the property is valued at 50k, needs 15k spending on it. will be worth around 80k when done.
New on here so go easy on me!
I've seen a property I want to buy which isn't mortgageable in its current state. I've only ever bought a 'normal' habitable house before. This one is a mess at present but will only take 2-3 months to complete. I spoke to a person on the phone the other day about bridging finance and was then told that after the works are done I could remortgage to pay the loan back and some extra funds on top and this could be done "anytime". In other words remortgage it up to 75% LTV thereafter (to repay the cash im putting in as a deposit and for the works to be completed)
I happened to bump into a mate who seems to know about mortgages etc. and he advised me to tread with caution in terms of the remortgage after the works are done because normally you have to wait at least 6 months before it can be remortgaged. He said that almost all lenders insist on this and that a lot of them will only lend up to 75% of the purchase price, NOT the new valuation. If this is the case the money I have saved could be tied up for a long time.
Anybody with experience of this? Is my mate talking sense or is the bridging finance person telling the truth about being able to remortgage? What firms would do a remortgage based on the higher valuation before (or after) 6 months?
thanks for your help in advance.
in terms of numbers, the property is valued at 50k, needs 15k spending on it. will be worth around 80k when done.
I am a Mortgage Adviser. You 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.
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Comments
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Your mate is right.
'Almost all' lenders insist you have owned the property for 6 or 12 months.
The key point is 'almost all'.
It can be done, speak to a competent mortgage broker.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 -
OK thanks. So what on earth was the bridging finance person on about?!
Any idea on who these lenders are?I am a Mortgage Adviser. You 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 -
Yes I do but cannot 'advise' you on this forumI 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 -
I suspect the bridging finance person is trying to sell you the bridging finance.
We often see people at their end of their tether when been "sold" bridging without a suitable exit.
Speak to a professional who will manage the exit, there will be cheaper solutions than that currently being offered upI 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
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