Bridging Finance to Purchase and Renovate Unmortgageable Property
The Bridging Finance Solution
Bridging finance can be utilised to purchase, or refinance unmortgageable property. Property needing repairs and refurbishment before they can be considered habitable would normally not be acceptable security for mainstream mortgage lenders.
Bridging enables property traders to buy property requiring renovation before reselling.
Accepted Properties for Unmortgageable Properites
- Residential Buy to Let
- Multi-Tenant HMO
- Mixed Use
- Part Commercial
Bridging Finance for Property Refurbishment
Property investors and developers can utilise bridging finance to fund the purchase and renovation costs of a property.
The schedule of works may be simply to make the property mortgageable, for example, by replacing broken or inadequate kitchen and bathroom fixtures.
Once the renovations have been completed the property can be rented and remortgaged, or sold, to exit the bridging loan.
Reasons to use Bridging Finance for Property Refurbishment
- Purchase property in poor condition
- No rental calculation on purchase
- Quick turnaround time
- Funds can be secured across several properties
- Remortgage within 6 months
- Refinance existing bridging loan Auction purchases requiring completion within 28-day deadline
Bridging Finance Working Example
Working example House Refurb:
Purchase price: £200,000
Loan amount 75% LTV: £150,000
Cost of works: £34,000
Refurb term: 6 months
New improved property value: £275,000
BTL mortgage amount at 85% LTV: £233,750
After 6 months from date of purchase has elapsed the property could be re-mortgaged to a buy to let term mortgage product up to 85% LTV. As you can see above, this can cover the initial purchase price and refurbishment costs.
Renovate Unmortgageable Properties Details at a Glance
- Facilities from £25,000 to £10 million
- 1st Charge loans
- 2nd Charge loans
- No ERC
- No minimum income
- Roll up of interest
- Interest only available
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