Bridging Loans for Rental Purchases

foolsgold99

Hi,
we just started a wee ltd rental company, which we hope will act as a pension. We have one property so far which we got a mortgage for.

We hope to have a few properties and are looking at the model of buying the next with a bridging loan. Then, once complete mortgage it, pay off loan and then bridge for another and so forth.

My questions are:

Does anyone have any experience of this and if so, do anyone recommend a company to get the bridging loan from in the first place?

Thanks for your help :T

G_M

I used a 0% credit card to buy a BTL. 2 months after Completion after renovation, got tenants in, and with the rent flowing took out a mortgage and paid off the credit cards.

foolsgold99

G_M wrote: »

I used a 0% credit card to buy a BTL. 2 months after Completion after renovation, got tenants in, and with the rent flowing took out a mortgage and paid off the credit cards.

I've heard of folk doing that but how do you actually pay for a house on a card? Normally cash funds need to be transferred via solicitors (we're in Scotland btw and the laws can be funny).

Also don't think that we would get enough on a card to purchase a property even with a big deposit.

davidmcn

foolsgold99 wrote: »

I've heard of folk doing that but how do you actually pay for a house on a card? Normally cash funds need to be transferred via solicitors (we're in Scotland btw and the laws can be funny).

However you get a cash advance on a card - never done it myself. Can't think of any relevant legal difference though.

G_M

Some cards (a minority) allow you to transfer the balance being borrowed to your bank account.


So you take out 5 cards with 0% balance transfer deals and transfer onto the one that allows cash.


Mind you, this was a while back when

a) cards were easy to get and crdit limits high
b) money laundering rules were less stringent


May not be so easy these days.........

Gwendo40

Very apt username for yet another highly leveraged, wannabe property entrepreneur.

ACG

Bridging loans in the main can only be obtained through a broker - there are a couple of exceptions.

It is an expensive way of obtaining money, if you can just go down the route of getting a BTL mortgage it would be cheaper, but appreciate there will be times Bridging is necessary.

Rates are going to be pushing the 1% per month - maybe a touch below but not massively and fees will be anywhere between 2-3% of the loan amount.