Buy to let or bridging loan?

marklunn3602

My partner and I are looking to start at buying houses to renovate and sell. I’m looking for thoughts on the best way to finance it. We’re looking for a small house to start with around £120k and have the 25% deposit and the funds for the renovation. However I’m trying to figure out whether to obtain a bridging loan or a BTL mortgage with no early redemption fees? 

lesalanos

Some lenders will not lend if the property is not rentable at purchase so bridging loan then remortgage after refurbishment to get most of the equity out and go again

Snookie12cat

marklunn3602 said:

My partner and I are looking to start at buying houses to renovate and sell. I’m looking for thoughts on the best way to finance it. We’re looking for a small house to start with around £120k and have the 25% deposit and the funds for the renovation. However I’m trying to figure out whether to obtain a bridging loan or a BTL mortgage with no early redemption fees? 

Do you plan to actually rent it? If not then you shouldn't be getting a BTL mortgage.

K_S

marklunn3602 said:

My partner and I are looking to start at buying houses to renovate and sell. I’m looking for thoughts on the best way to finance it. We’re looking for a small house to start with around £120k and have the 25% deposit and the funds for the renovation. However I’m trying to figure out whether to obtain a bridging loan or a BTL mortgage with no early redemption fees? 

@marklunn3602 It'll depend on how 'bad' the condition of the property is. If habitable (subjective assessment of the valuer), then you should be able to get a BTL mortgage.

If it's not then the only option may be to get a more expensive bridging loan.

dimbo61

Do you already own a property ?
Have you renovated it and increased its value ?
Bridging Loans can be a very expensive way of borrowing money and trying to flip properties every 6/12 months can be Extremely difficult in the current climate.
Say you buy a run down property for a bargain price and replace the kitchen and bathroom to  lovely modern standards.
You may need to rewire the whole property so £3/4,000 on that or at the very least an EICR test.
New central heating boiler and radiators so £4/5000 and has to be passed by a Gas Safe Engineer.
When you come to sell the surveyor will look at recent sales and hey press tow your asking £30/40,000 more than you paid 6/9 months ago ( For What ?)
You would also have to pay income tax

london21

marklunn3602 said:

My partner and I are looking to start at buying houses to renovate and sell. I’m looking for thoughts on the best way to finance it. We’re looking for a small house to start with around £120k and have the 25% deposit and the funds for the renovation. However I’m trying to figure out whether to obtain a bridging loan or a BTL mortgage with no early redemption fees? 

Bridging loan can be very expensive for example 0.5% per month.

Also when ready to sell property would have had to have been owned for at least 6 months in order to attract more buyers as a lot of mortgage provider lend on properties after 6 months ownership.