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Bridging finance help please
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Aiadi
Posts: 1,840 Forumite
Hello
I am looking at investing in another buy to let property (I have one buy to let property in London on a fixed rate mortgage which I will remortgage in October releasing some equity but until then I have limited cash to invest).
I have seen an auction property (guide price £100k) in Scotland (in the town I live now) which looks very appealing (I've done my homework) and I have about £15-20k deposit.
I would like to buy the auction flat with some sort of finance and I've done my research on different mortgages. Buy to let is out, as I've not got enough time. It's not strictly a development project (the flat is very modern) and I will rent it out immediately likely.
So in my mind all that is left is bridging finance. Is this right? I would aim to pay off the bridging finance by remortgaging the flat to buy to let mortgage after purchasing it. Are there restrictions or penalties usually with paying off bridging finance quickly?
How long does it typically take to obtain bridging finance?
Where to look for reliable and good advice about bridging finance? I'd rather have some professional advice rather than googling - where to go? Thanks.
I am looking at investing in another buy to let property (I have one buy to let property in London on a fixed rate mortgage which I will remortgage in October releasing some equity but until then I have limited cash to invest).
I have seen an auction property (guide price £100k) in Scotland (in the town I live now) which looks very appealing (I've done my homework) and I have about £15-20k deposit.
I would like to buy the auction flat with some sort of finance and I've done my research on different mortgages. Buy to let is out, as I've not got enough time. It's not strictly a development project (the flat is very modern) and I will rent it out immediately likely.
So in my mind all that is left is bridging finance. Is this right? I would aim to pay off the bridging finance by remortgaging the flat to buy to let mortgage after purchasing it. Are there restrictions or penalties usually with paying off bridging finance quickly?
How long does it typically take to obtain bridging finance?
Where to look for reliable and good advice about bridging finance? I'd rather have some professional advice rather than googling - where to go? Thanks.
Do I want it? ......Do I need it? ......What would happen if I don't buy it??????
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Comments
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One snag may be that lenders don't like remortgages until the property has been owned for 6 months.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Bridging finance is an expensive way to borrow short term. Both in interest costs and fees. Also you appear to have a high LTV. Not enough equity to give the lender comfort should things not go to plan.0
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THanks
I know it's an expensive way to do it but the property is a good price, £10k+ below market value so I'd take the hit with the slightly higher interest rate/fees for 6 months as I think worth it long term.
Is there an alternative way without having more time/cash?
ANy particular lender anyone would advise?Do I want it? ......Do I need it? ......What would happen if I don't buy it??????0 -
You will need more deposit.
Assuming it goes for the guide you would be looking for 80% LTV.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 -
So today I have looked into my finances a bit more carefully and I can afford to put in up to £25k deposit.
Also the closing date for offers has been changed to late APril. So I have more time than I thought. Which buy to let lenders are the quickest?Do I want it? ......Do I need it? ......What would happen if I don't buy it??????0
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