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How do you unlock funds for new property purchases?

THE QUESTION

I have a BTL property owned for 3 months which has 2 years ERC on it so I don't want to remortgage, but can I use the property as a security to buy another refurb property.  The property was originally purchased on a 75% LTV BTL mortgage, but has been re valued after refurb works and is now at 57% LTV.

Ideally I want to get on with buying and refurbing another property which...

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BTL Mortgage - and convert to HMO?

THE QUESTION

With regard to mortgages and HMOs if you buy a house using a BTL mortgage, with a no Early Repayment Charge can you then convert the property to an HMO and swap the mortgage over to an HMO mortgage?

THE ANSWER

Great strategy... if you want to get yourself blacklisted by No ERC mortgage lenders!

These lenders get really annoyed at being used as surrogate bridging...

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Buying at auction - but not completing

THE QUESTION

What happens if you don't complete on time when buying at auction?

THE ANSWER

When you bid for a property and your bid is accepted you have made a commitment to purchase; to all intents and purposes the property has been sold to you and you will have to pay a 10% deposit at the point of sale.  If you fail to complete by deadline date, the vendors solicitor will give you...

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Finance for a new build

development finance Jul 27, 2016

THE QUESTION

I want to get into building a brand new property, what type of finance is needed for this and how does it work?

THE ANSWER

New build projects require development finance and this is structured in a specific way.  Pre-credit crunch this was freely available from the major banks, but they pulled out when the credit crunch hit, with disastrous consequences for many of their...

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Buy with cash - and then mortgage

buy to let Jul 17, 2016

THE QUESTION

Can I remortgage a property immediately after cash purchase?

THE ANSWER

With regard to how and when you can remortgage, the method of purchase is irrelevant;  buying with cash doesn't make any difference to the property's mortgageability.  What is relevant is the lender's attitude to remortgaging a property recently bought.

Almost every BTL lender has a six month...

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A property with challenges - yes or no?

THE QUESTION

I have found a property I want to get a buy to let mortgage for, but I have a bad credit rating.  The house also has no kitchen, are there any lenders that would be able to provide a mortgage for this?

THE ANSWER

Take a reality check on this one, you have zero chance of getting a mortgage on this property as a means of buying it.

Leaving aside your credit history, a...

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What will a bridging loan cost?

bridging finance May 27, 2016

The Question

I am considering the use of a bridging loan and would like to know:

  • What are the typical fees?
  • Over what time period can you get a loan?
  • How quick is the approval process?
  • Who provides the most competitive rates and lowest fees?

The Answer

There are a number of bridging lenders and the criteria vary from lender to lender depending on your particular circumstances and the...

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One building, two flats

buy to let Feb 24, 2016

Another interesting question from one of my investors:

I'm viewing a house which has been split into two flats. I believe that the title has not been split. What are the rules for lending on a property like this? I am guessing I won't be able to use a standard BTL mortgage? Anything else I should be wary of for a property converted into two flats?

The Answer

The first rule on any property...

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What would you do with a windfall?

strategic planning Feb 18, 2016

This is a little different to the usual questions I get asked, but quite interesting to consider.  The windfall could come from a number of sources - an inheritance, some good property deals or - as this questioner suggests winning it!

The question:

If you won £500,000, how would you invest it to maximise your monthly cash flow?

The answer:

The answer you would normally get from...

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Do I need a professional valuation?

Question

I am currently going through a remortgage on one of my properties to release some equity to buy two further properties. 

I have a good idea that I have valued the house right myself from the research I have done and as such I have submitted this number to the mortgage provider. 

Should I have got a professional valuation first to avoid the risk that the valuation comes in...

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