Buy To Let or Bridging Loan

00mrmark00

Hi All,

I’m looking to purchase a second property that is presently unoccupied and very much in disrepair. I have been informed by the agent that it is a repo.

My plan is to renovate the property and then eventually move in after selling my current house, which is still to go on the market.

I have been advised to go for a BTL mortgage for this purpose. So far the best product I have found is a Lifetime Tracker from the Halifax which has no redemption fee. Operates at 2% above BOE base rate.

Obviously this is pretty high and therefore I was looking for any guidance on how to better go ahead with the purchase. Also as the mortgage is BTL I also need to find the 15% deposit, which I was planning to raise via a personal unsecured loan.

Any help gratefully received.

UK007BullDog

Definately one for the brokers.

A bridging loan is expensive and highly risky if you do not sell your current property on time.

A BTL is a good option. How much equity do you have in your property? If it is a lot you could do a furter advance on your current house and use that as your 15% deposit.

Mind you though the lenders will only agree to that if the current rental income covers the mortgage up to 130%.

However there are BTL mortgages available lending up to 100% so you might not need a deposit.

In the end you have to be realistic as to how long you will need to do up the property and how quick you can sell the other.

00mrmark00

Thanks Bulldog.

I have looked into releasing some of the equity from my current house. But the lender, Nationwide won't offer more than 85% if it is not used for the current property. This results in a shortfall.

My second option was to get a loan from someone like NR who is currently offering 6.9%.

Are there any good websites I could use to do a quick comparison? In addition, how do I find a good independent mortgage advisor?

travelchick

how much is the house your buying selling for? im being cheeky im looking for pretty much the same thing and if our houses are about the same price maybe we can swap advice? im seeing my FA tomorrow

Trav

00mrmark00

Hi,

The house is on the market for £85,000...

I have also considered a 2nd mortgage, but im not sure this is allowed???

JoeK_3

Please post the following:

Existing property value
Exiting mortgage amount
Income/s

JoeK

travelchick

Thats a good price for a house good find. (mines £155)
I guess at that price I wouldnt get a bridging loan the rates are just to high what about a let to buy?????
Instead of selling your house use it as a rental? it works pretty much the same way but you just use your current house as a rental, when you move.
If you look on rightmove.com under their rental section it will give you and idea on what house's in your area are renting for?
You may even find that its a sound investment for the future? thats what im thinking of doing with my other house.
What I will say is (im an estate agent But i dont touch martgages lol) when you buy a repo it will stay on the market and at any time before exchange if a higher offer comes in there is a 99% chance the repo company will switch to sell to the highest bidder, You wil have to have exchange of contracts within 28 days BUT if you can get a a good solicitor and Mortgage push for a faster exchange make sure you tell your FA you want a fast ball as some lenders will not be hurried (trust me)

Hope it goes well for you.


Trav

MortgageMamma

You need to speak to a Mortgage Broker. You might not even have to take a BTL mortgage on the second property, too many variables to go through on an internet site by my bet is that either a NR together mortgage on first property OR a let to buy mortgage would be most appropriate for you.

MM

00mrmark00

Thanks MM - I will go and seek out an IFA in my local vacinity...

Trav,

Is the property you are persuing also a repo?

Yes, it does concern me that I could fork out for the valuation, only to be gazumped over and over...

JoeK_3

In my opinion you are pursuing an extremely high risk strategy by not ensuring that you can complete in a matter of days.

You could incur an enormous amount of money be refinancing your existing property and find that you have been gazumped at the final hurdle.

The only way to deal with repo's is to get the deal done and dusted, quick.

Take care.

JoeK

travelchick

Yep Im in the same basket
I to am buying a repo may i suggest you ask your FA about convayencing insurance.
Its not that costly but if you do get gazumped at very least you can get your solicitors fees covered, The other thing to try is to appeal to the selling agents they will still have to advertise the property (its a contact requirment not a choice) but you could try to sweet talk them into a more low key advertising, most agents get fed up with having to tell familys that they have lost their dream home because an uncaring repo firm is switching for the sake of a few extra ££££
Good luck and keep me posted,
If you find things taking to long I used to be a negotiator and can always tell you who and when to chase to make sure this move on as fast as possible

Trav
x

Ps sorry about typos its late lol