Personal loan advice

M47

Hello everyone,

Could anyone recommend the best and most simplest avenue to obtain a personal loan?

I have hit a dilemma as currently have low cash flow at the moment as I am transitioning my financial situation.

 I am in the process of remortgaging a BTL property, all was going great, I passed the underwriting stage and all that was left was the property valuation. The same tenant has been living there for the past 4-5 years. When he entered the property it was immaculate, long story short he has ruined my house!!! The valuer fed back to the lender detailing that the property was in an extremely run down state. The lender has now said that they will not lend until the property has been renovated.

They said I’d need to put in a new kitchen, bathroom and complete refurbishment.


The annoying part is that I am in a chain in purchasing another property and needed the funds from this remortgage to buy this other property.

I know it’s generally not a good idea to take out a personal loan right before obtaining another BTL mortgage but, I must quickly refurbish my current BTL in order to remortgage and release funds to buy this other property.

it’s only a small amount I’d need, like around 10k.

can anyone recommend the best, most sensible personal loan options I could obtain, without it becoming problematic when I immediately obtain another BTL to purchase this other house. As soon as I receive the funds from this remortgage I would repay this small personal 10k loan immediately.

should I work with a broker in obtaining this 10k personal loan?

any help or advice would be greatly appreciated.

thank you in advance 

MattMattMattUK

M47 said:

Hello everyone,

Could anyone recommend the best and most simplest avenue to obtain a personal loan?

I have hit a dilemma as currently have low cash flow at the moment as I am transitioning my financial situation.

 I am in the process of remortgaging a BTL property, all was going great, I passed the underwriting stage and all that was left was the property valuation. The same tenant has been living there for the past 4-5 years. When he entered the property it was immaculate, long story short he has ruined my house!!! The valuer fed back to the lender detailing that the property was in an extremely run down state. The lender has now said that they will not lend until the property has been renovated.

They said I’d need to put in a new kitchen, bathroom and complete refurbishment.


The annoying part is that I am in a chain in purchasing another property and needed the funds from this remortgage to buy this other property.

I know it’s generally not a good idea to take out a personal loan right before obtaining another BTL mortgage but, I must quickly refurbish my current BTL in order to remortgage and release funds to buy this other property.

it’s only a small amount I’d need, like around 10k.

can anyone recommend the best, most sensible personal loan options I could obtain, without it becoming problematic when I immediately obtain another BTL to purchase this other house. As soon as I receive the funds from this remortgage I would repay this small personal 10k loan immediately.

should I work with a broker in obtaining this 10k personal loan?

any help or advice would be greatly appreciated.

thank you in advance 

What is your income and sources, any PAYE, personal debt, LTV on BTL properties?  

Do you have a sinking fund for maintenance and unforseen issues, non-payment of rent etc.?

Are you evicting the tenant and retaining the deposit? Do you have landlord insurance for damage?

Hoenir

The same tenant has been living there for the past 4-5 years. When he entered the property it was immaculate, long story short he has ruined my house!!! 

You've never inspected the property in all that time? Likewise you've built no reserve for property maintenance. Adding another property to your portfolio is likely to compound your problemd in the longer term

M47

Thanks for your reply MattMattMattUK

I am self employed handyman and also receive income from 3 BTL properties.

 don’t have a sinking fund for unforeseen issues at present, or landlord insurance.

I am evicting him, however he didn’t pay his rent on purpose to obtain his deposit back.

Thank you for your suggestions but they aren’t options for me right now

tacpot12

Have you looked at zero percent credit cards? It might reduce the amount you need to borrow, and the zero percent periods should be long enough to see the tenant evicted.

I doubt there is a clever way to get this credit that won't impact you when you next apply for a BTL mortgage (e.g. Peer-to-Peer lending will be recorded on your credit record).  Only a loan from friends or family that wasn't registered on your credit record would avoid any impact. There is nothing to stop you coming to a formal agreement via a solicitor with a friend or family to lend you the money. This would only get registered on your credit record if you failed to pay them back and they sought a County Court Judgement. The loan could even be secured using a second charge on one of the BTL properties, although this would add to the legal bill significantly. 

Mr.Generous

A personal loan from your own bank takes about 5 minutes. I wouldn't get a second property until you have a small cash reserve or it could all fall down very quickly.

M47

Thank you tacpot12  for your comments, do you know if it would effect my next BTL mortgage, if family member took the loan for me on their name, but I stood as a guarantor?

Tucosalamanca

All ready over-leveraged and in the process of buying more property - what could possibly go wrong?

You're a BTL landlord with no sinking fund and with a new government looking very likely.
Not to mention inflation/interest rate movements which continue to be unpredictable.

Get a solid plan in place and build up a cash reserve before taking on more debt (or buying more properties) would be my advice.

Brie

I'm glad I'm not in your situation but mostly because I would hate to be a LL. 

Not a recommendation but we recently had a kitchen refit by a national DIY firm with an orange logo and they offered a 4 year 0% finance programme.  Might be an alternative to a bank loan.  Personally I was surprised at the amount of credit this scheme gave me - about twice as much as needed for the kitchen and the ability to use it to go and buy more stuff as required.  Term stays fixed as does the 0% but the monthly payments fluctuate based on what is purchased or returned.  

M47

Tucosalamanca & Hoenir respectfully once I am able to obtain this remortgage I will be very financially stable as I have a huge amount of equity in this property, thank you for your concerns though.

and to Brie and everyone else who’s contributed to this thread so far, I’d like to thank you for your suggestions. Although the 0% finance does sound good, but do you know if they’d cover the labour costs of all of the other work needed? As I’d need a full refurb. I really appreciate your suggestion.

Thank you 

Brie

M47 said:

Tucosalamanca & Hoenir respectfully once I am able to obtain this remortgage I will be very financially stable as I have a huge amount of equity in this property, thank you for your concerns though.

and to Brie and everyone else who’s contributed to this thread so far, I’d like to thank you for your suggestions. Although the 0% finance does sound good, but do you know if they’d cover the labour costs of all of the other work needed? As I’d need a full refurb. I really appreciate your suggestion.

Thank you 

There was the option to pay the labour separately (& recommended for some bits of the job) but it could all be bundled in with the 0% finance.  I had assumed from some of your comments that you would be doing some/most of the work yourself.