Hi Kevin, Thanks for your great content, well simplified and easy to understand. So I am new to property and would like to know if when you exchange on a done up value bridge using delayed completion do need to pay deposit and stamp duty on exchange. Thanks Daley
Glad you think so Daley.. You do need to pay a deposit when you exchange contracts, normally it is 10% but that is not mandatory, you can agree a lower figure with the seller. Stamp duty is payable at exchange of the completion is longer that 3 months away. if it is within 3 months it is paid on completion.
Thank you Kevin, I didn't know about all the different types of bridging finance. For the refurb bridging, am I right in thinking that you would need about 20% of the purchase price and a third of the renovation budget in order to use that? And then at the end of the renovation they would give you back your first third? Thanks
neither does pretty much everyone else Jason, so dont worry about that. You are going to need a 25% deposit for a refurb bridge product, almost certainly but for the rest of what you say - pretty much spot on.
You don't need bridging finance if can cover the refurb costs. You can structure a deal where you agree on the sale price but delay the completion to do the refurb and have a mortgage put on after at the new done up value when you draw the mortgage down. You just need a commercial broker and a commercial solicitor who understands how to do this, and yes, you can put a commercial mortgage on a buy to let as I've spoken to a broker who can arrange a lender to do this!
The problem you have with what you suggest is that mortgage lenders base the loan on the lower of the purchase price or value, and not the done up value, at the point of purchase. You have spoken to a broker who says he can arrange that but the proof is in the pudding' as they say. As a commercial broker of many years standing I can tell you you wont find it anywhere near as easy as you might imagine. Of course you can put a commercial mortgage on resi properties, that has always been the case and we have been brokering that, where needed, for years. When you do that delayed completion structure, you have to first convince the seller to do what isn't normal, giving you the keys and permitting you to knock their property about whilst they still own it. Once you have convinced them, their solicitor needs to also be convinced and they will advise their client not to let you do it, purely on the basis it isn't normal rather than any illegality about it. We have been brokering this EDC strategy for the last decade or more. Usually the decisive factor in getting permission to enter the property and carry out refurb work prior to completion is the degree of the sellers motivation - the higher it is, the more likely it is that they will agree to it. Good luck with it and when you have actually done what you say, do post back with which lender did it for verification.
Hi Kevin, Thank you so much for all the information. I was wondering if i was to get a bridging loan first charge on a investment property i want to buy. Then get a cross collateral 2nd charge bridging loan on my home to fund the deposit on the 1st charge. Do bridging lenders need you to have some cash in the deal if so how much in percentage terms. Also would there be a minimum loan amount? Keep up the good work still getting my head round bridging through your help.
thanks for your kind comments Ryan, I am glad you are getting some value from the videos I record and put out. When you are using a Cross Collateral Bridge on a property you already own, that acts as the cash deposit. So, as long as the usable equity you have in your property is enough to cover the deposit in full, you won't be required to top it up with any cash. If you don't have enough usable equity then you will be required to make up the shortfall with cash but, rather than any specific percentage, it will just be the amount that you are short by.
Hey Kevin, you jnfo has been so valuable!I never knew these types of loans existed! I wonder if you could answer my question as I'm unsure what the options are .. me and my sister want to buy a house for my dad a retired handy man to fix and flip. We've got a decent chunk to refurb and can borrow more from family if needed but want to flip so that my dad can have a nice best egg for retirement or even potentially rent it out once its been refurbished. Initially we thought get a regular mortgage and then sell after 6 months and incure the fees becajse we would get the profit from the extra value added through a extension ect . But after watching your videos realised this is the wrong way to go , do you take online meetings for advice ? Many thanks
Welcome Aarif, most people don't know they exist either, now you do though. Love the idea of you helping your dad to use his time served skills to have a more comfortable retirement. If you have watched my video' How to fund flips', you will realise that it is fraudulent to get a mortgage when you intend to sell the property a few months later. The fraud part is pretending to the lend you want to keep the property a few years when you don't. Tel them you want it for a few months and they will terminate your application. Cash, bridging, or a mix of both is the correct way to finance a flip. Yes that is possible but make sure you watch videos that answer your questions first, as a conversation that I say watch this video to answer that won't be productive either way
Kevin, the last time I investigated bridging, the overall costs equated to around 1.5% per month, taking into account arrangement fee, broker fee, and valuation costs. Does that sound like a reasonable ballpark figure? p.s. Good video. Never heard of done up bridging before. Very interesting.
Thanks for your interest TC. You are correct that it is not just the rate but there are all the fees you mention, I would add one more, the lenders legal fees which you also have to pay. 1.5% is not too far out as a ball park figure, certainly for a 6 month term but if you go for say a 12 month term it is slightly over egging it a bit. When I am training investors, I use a slightly different ball park calculation - based on the purchase price you pay, all in cost of bridging would be 10% over a 6 month term and 15% over a 12 month term. Why only 5% extra for a further 6 months? There are none of the additional front end fees you mentioned, purely monthly interest and that is invariably below 1% per month. I rarely meet anyone who has already heard of all 5 types of bridging. Done Up Value bridging is something I have been teaching investors how to do for at least the last 10 years.
no you cant - with a done up value bridge you have to finance to refurb from your own cash, or borrow the cash privately, I will explain why. Bridgers wont lend you money on a property you don't yet own. You would use a done up value bridge with the delayed completion strategy that I teach. This is exchanging contracts, getting the owners permission to do the refurb and delayed the completion until the refurb is finished. So you do the refurb before you actually own the property and because the sellers name is still on the deeds, you cannot borrow any money against the property during the refrub period. Once the refurb work is finished and before you complete, the property is valued by the Done Up Value bridgers valuer and now you borrow against the uplifted value your refurb has created.
Hi Kevin, informative video - thank you. I’m thinking about setting up a company with my parents to do flips. They own several properties, including 1 without a mortgage. Can the company use this property as security for a cross collateral bridge, even though I don’t own it? Thanks
Hi Freddie, thanks glad you enjoyed it. The answer is yes that is possible but only as long as your parents, as the owners of the unencumbered property are party to the bridging loan as well, which they would be if you are all shareholders of the Ltd Co you intend to form.
Thank you for your quick reply - useful to know! The other thing I should mention is the property in question is in Bristol city centre above commercial (restaurants etc). Would this effect its potential to be used as security for the bridging loan?
Such a brilliant video! Thank you for taking time and producing them. May I please ask one question: in a delayed completion deal, could not one get a conventional mortgage at the done up value? Is getting keys at exchange in breach of an arm length sale?
questions are always welcomed, so thanks and I love producing these videos for people to learn and enjoy The basis premise that mortgage lenders work to is that, at the point of purchase, their lending is based on the lower of the value or purchase price. This means the higher done up value will be ignored and the mortgage will be based on the lower purchase price. So certainly you will be able to get a mortgage but you will leave a typical 25% deposit plus all your refurb costs stuck in the deal. When you use a Done Up Value Bridge you get most of that cash back out on the day you complete, then you remortgage at the done up value too because one you own the property mortgage lenders are less dogmatic about the purchase price you paid although you still have to present their valuer with a robust case for the valued you have added. When you get the keys at the point of exchanging contracts and defer the completion for a few weeks longer than the standard 28 days, that in itself does not breach the notion of an arms length transaction. For purchases stuck in a chain there can often be delays similar to the delay you are using here. Moreover, when you are using bridging, mortgage lenders are not involved in the purchase, so their notion of the arms length nature is not a factor.
Hi kevin hope your well atm I love your videos! What are your thoughts on buying property in this current climate? Is it best to let the dust settle for the foreseeable future or is it a grab it by the horns situation?
very well thank you Michael and I am pleased you are loving my videos. During the lock down, it is more difficult but not impossible to actually buy properties anyway, as all the component parties in the buying process grapple with how to operate virtually. We are seeing that some but not all agents, brokers, lenders, valuers, solicitors have adjusted how they can operate in a virtual capacity. Post lock down will see greater opportunities for sure. Whether to dive in or sit and wait is in part going to depend on what you intend to do with any property you would purchase. Will property values dive and take some time to recover or bounce upwards more quickly is the interminable question isn't it? Doomsayers abound but are they right, or just scaremongering? It seems difficult to predict that with any degree of accuracy. You could look at dividing your question into during and post lock down. During lock down can be a great time for identifying buying opportunities. After lock down care should be taken to be as accurate as you can be about done up values of any project you take on, factoring in a contingency for soft rather than buoyant prices. A quick buy, refurb and sell again deal would be more exposed to a post lock down slump in prices. were one to occur. A fairly extensive structural refurb or conversion project that will take several months could be something to get stuck into if it can be bought at a favourable price, giving you time to let any dust that may settle, settle. Also something to factor in is whether you intend to sell on the project or keep it, refinance and rent it out. The demand for rent is going to remain strong for simple supply and demand reasons. Fortune favours the brave is a saying but pragmatism and mitigating the downside risk of any purchases far as you can would seem to be prudent.
Kevin Wright much appreciate the length and detail of your reply it was insightful and clarified a few of my suspicions, you are the man! Will you still be acting as a finance broker after lockdown? If so could you please point me in the direction of how to get in contact with you that would be great thanks.
@@michaelgregory9233 - I always aim to add value, so I am glad you got some in this instance. We have been brokering for over 20 years and have no plans to stop anytime soon. Here are my contact details 07889 526979 inspireme@thinkpositively.co.uk
Michael Gregory Kevin’s the man! Out of most of the property guys on UA-cam, I think Kevin provides the most in depth knowledge, I’ve learnt a lot just from his videos!
Hi Kevin, I've gone through the video a few times and it seems like the explanation for both a purchase bridge and market bridge seems to be the same. I am correct in assuming that a market bridge will lend on the market value and not the purchase price regardless if the purchase price is higher or lower than the market price.
Mark? A Purchase Bridge and a Market Value Bridge are not the same Ash, let me spell out the difference between them and see if you get it in a way that you did not get it by watching the video several times - A Purchase Bridge lends on the lower of the value or the purchase price A Market Value Bridge lends on the lower of the value or the asking price That definitely is not the same thing Lets say a property is for sale and the asking price is £100,000 and its market value is £100,000 too - but, because the seller now needs a quick sale they are motivated to let someone who can buy it quickly buy it cheaper, and your lower offer of £80,000 is accepted. So lets check those numbers - Asking price - £100,000 Market value £100,000 Purchase price - £80,000 Lets work on both types of bridging loan lending 75% A Purchase Bridge lends on the lower of the value (£100k) or the purchase price (£80k) - £80k is lower than £100k so the Purchase Bridge lends 75% of £80k = £60k A Market Value Bridge lenders on the lower of the value (£100k) or the asking price (£100k) - both are £100k so the Market Value Bridge lends 75% of £100k = £75k So if a Purchase Bridge will only lend £60k but a Market Value Bridge will lend £75k, on the same property being sold for the same price - they are different and not the same. Hope that helps Aah
Do bridging companies lend money for the deposit and refurb on a property only? Property to be purchased through a limited company with a mortgage in its name. Is this possible ?
Good question Edson, the answer is it is absolutely not possible. When you buy with a mortgage you use up all the available equity a bridger would lend on, so there is nothing left for them to lend. This means, if you have already borrowed 75% of the value of the property using a mortgage, the bridger is not going to lend you anything on top of that, as it is too risky for them. Using a Limited Company or not is irrelevent to the question, it makes not a jot of difference here. If you want to borrow using a mortgage, then borrow the deposit and refurb costs as well, that indicates you have no cash of your own or access to any cash - that isnt going to work. You need to re-think how you are going to get into buying investment property without putting any cash in - bridging is not the answer here.
I am unemployed but I have a property with £100k equity. Could i use cross collateral bridging, refurb the property then bring in a JV partner who has an employed income when it comes to refinancing to a BTL mortgage?
@@healthiswealth8153 - here is the calculation £170k x 65% (max ltv on 2nd charge) = £110,500 - less £70k mortgage = £40,500 of usable equity for cross collateral bridging use.
Hi Kevin, digestiing all the information in your youtube videos..All very insightful.. My bro is interested in addind value to his BTL by extending it from a 2 bed to a 4 bedroom but he's got no cash to do this. How do you suggest he can finance this?.He's only got about 40k equity on the property. Thank you.
Hi Segun, glad you like them. Not an easy solution to this. His mortgage lenders will only consider lending him more money after he has done the work, not before. No bridger is going to lend to him as he has insufficient equity in the property. The only real option is to borrow privately. Before doing that, he should check how much value 2 extra bedrooms will add, do they all meet the local councils minimum room size regulations, will his mortgage lender give him a further advance to repay the private borrowing.
@@KevinWrightProperty waoh what a quick response from you..Much appreciate this info.Will pass it on to him. I havent seen anyone that answers people's questions on social media platforms like you do in a detailed manner without a dime. Just like you do on all the property forums that I am on facebook. Thanks a lot.
@@SegunA887 - no problem, keep following me on the sm platforms. I would a appreciate a little bigging me up to others in property when you get the chance.
Another great video. Thank you Kevin.
thanks Ash
Hi Kevin, thank you for sharing this valuable information 😊
welcome Robertas
Great video. Really great explanations of the different bridging finance available. Seriously opened my eyes to the possibilities.
Glad that it resonated with you to that extent Carl
Thanks Kevin - eye opening to the possibilities
you are welcome
Very good video with great information. Thank you for the good work.
you are very welcome Ikenna - have you subscribed yet?
Thank you Kevin. Didn’t realise there are so many different types of bridging finance .
you do now then Sam
This info really does help. Will contact you in the week. Ive subscribed.
that's great, glad it is helping you. Thanks for subscribing.
Hi Kevin,
Thanks for your great content, well simplified and easy to understand.
So I am new to property and would like to know if when you exchange on a done up value bridge using delayed completion do need to pay deposit and stamp duty on exchange. Thanks Daley
Glad you think so Daley.. You do need to pay a deposit when you exchange contracts, normally it is 10% but that is not mandatory, you can agree a lower figure with the seller. Stamp duty is payable at exchange of the completion is longer that 3 months away. if it is within 3 months it is paid on completion.
Thank you
Thank you Kevin, I didn't know about all the different types of bridging finance. For the refurb bridging, am I right in thinking that you would need about 20% of the purchase price and a third of the renovation budget in order to use that? And then at the end of the renovation they would give you back your first third? Thanks
neither does pretty much everyone else Jason, so dont worry about that. You are going to need a 25% deposit for a refurb bridge product, almost certainly but for the rest of what you say - pretty much spot on.
You don't need bridging finance if can cover the refurb costs. You can structure a deal where you agree on the sale price but delay the completion to do the refurb and have a mortgage put on after at the new done up value when you draw the mortgage down. You just need a commercial broker and a commercial solicitor who understands how to do this, and yes, you can put a commercial mortgage on a buy to let as I've spoken to a broker who can arrange a lender to do this!
The problem you have with what you suggest is that mortgage lenders base the loan on the lower of the purchase price or value, and not the done up value, at the point of purchase. You have spoken to a broker who says he can arrange that but the proof is in the pudding' as they say. As a commercial broker of many years standing I can tell you you wont find it anywhere near as easy as you might imagine.
Of course you can put a commercial mortgage on resi properties, that has always been the case and we have been brokering that, where needed, for years.
When you do that delayed completion structure, you have to first convince the seller to do what isn't normal, giving you the keys and permitting you to knock their property about whilst they still own it. Once you have convinced them, their solicitor needs to also be convinced and they will advise their client not to let you do it, purely on the basis it isn't normal rather than any illegality about it. We have been brokering this EDC strategy for the last decade or more. Usually the decisive factor in getting permission to enter the property and carry out refurb work prior to completion is the degree of the sellers motivation - the higher it is, the more likely it is that they will agree to it.
Good luck with it and when you have actually done what you say, do post back with which lender did it for verification.
Hi Kevin, Thank you so much for all the information. I was wondering if i was to get a bridging loan first charge on a investment property i want to buy. Then get a cross collateral 2nd charge bridging loan on my home to fund the deposit on the 1st charge. Do bridging lenders need you to have some cash in the deal if so how much in percentage terms. Also would there be a minimum loan amount?
Keep up the good work still getting my head round bridging through your help.
thanks for your kind comments Ryan, I am glad you are getting some value from the videos I record and put out. When you are using a Cross Collateral Bridge on a property you already own, that acts as the cash deposit. So, as long as the usable equity you have in your property is enough to cover the deposit in full, you won't be required to top it up with any cash. If you don't have enough usable equity then you will be required to make up the shortfall with cash but, rather than any specific percentage, it will just be the amount that you are short by.
@@KevinWrightProperty great news thank you for replying so quickly.
Hey Kevin, you jnfo has been so valuable!I never knew these types of loans existed! I wonder if you could answer my question as I'm unsure what the options are .. me and my sister want to buy a house for my dad a retired handy man to fix and flip. We've got a decent chunk to refurb and can borrow more from family if needed but want to flip so that my dad can have a nice best egg for retirement or even potentially rent it out once its been refurbished. Initially we thought get a regular mortgage and then sell after 6 months and incure the fees becajse we would get the profit from the extra value added through a extension ect . But after watching your videos realised this is the wrong way to go , do you take online meetings for advice ? Many thanks
Welcome Aarif, most people don't know they exist either, now you do though.
Love the idea of you helping your dad to use his time served skills to have a more comfortable retirement.
If you have watched my video' How to fund flips', you will realise that it is fraudulent to get a mortgage when you intend to sell the property a few months later. The fraud part is pretending to the lend you want to keep the property a few years when you don't. Tel them you want it for a few months and they will terminate your application.
Cash, bridging, or a mix of both is the correct way to finance a flip. Yes that is possible but make sure you watch videos that answer your questions first, as a conversation that I say watch this video to answer that won't be productive either way
Kevin, the last time I investigated bridging, the overall costs equated to around 1.5% per month, taking into account arrangement fee, broker fee, and valuation costs. Does that sound like a reasonable ballpark figure?
p.s. Good video. Never heard of done up bridging before. Very interesting.
Thanks for your interest TC. You are correct that it is not just the rate but there are all the fees you mention, I would add one more, the lenders legal fees which you also have to pay. 1.5% is not too far out as a ball park figure, certainly for a 6 month term but if you go for say a 12 month term it is slightly over egging it a bit. When I am training investors, I use a slightly different ball park calculation - based on the purchase price you pay, all in cost of bridging would be 10% over a 6 month term and 15% over a 12 month term. Why only 5% extra for a further 6 months? There are none of the additional front end fees you mentioned, purely monthly interest and that is invariably below 1% per month.
I rarely meet anyone who has already heard of all 5 types of bridging. Done Up Value bridging is something I have been teaching investors how to do for at least the last 10 years.
with the done-up bridge can you use the bridging to finance the refurb?
no you cant - with a done up value bridge you have to finance to refurb from your own cash, or borrow the cash privately, I will explain why.
Bridgers wont lend you money on a property you don't yet own. You would use a done up value bridge with the delayed completion strategy that I teach. This is exchanging contracts, getting the owners permission to do the refurb and delayed the completion until the refurb is finished. So you do the refurb before you actually own the property and because the sellers name is still on the deeds, you cannot borrow any money against the property during the refrub period.
Once the refurb work is finished and before you complete, the property is valued by the Done Up Value bridgers valuer and now you borrow against the uplifted value your refurb has created.
Hi Kevin, informative video - thank you. I’m thinking about setting up a company with my parents to do flips. They own several properties, including 1 without a mortgage. Can the company use this property as security for a cross collateral bridge, even though I don’t own it? Thanks
Hi Freddie, thanks glad you enjoyed it. The answer is yes that is possible but only as long as your parents, as the owners of the unencumbered property are party to the bridging loan as well, which they would be if you are all shareholders of the Ltd Co you intend to form.
Thank you for your quick reply - useful to know! The other thing I should mention is the property in question is in Bristol city centre above commercial (restaurants etc). Would this effect its potential to be used as security for the bridging loan?
@@FreddieVernon - can't see why that would be a problem for bridgers
how soon after the done up bridge can you refinance at the done up value?
Straight away with some lenders but after 6 months ownership to get a fuller choice of lenders.
Such a brilliant video! Thank you for taking time and producing them. May I please ask one question: in a delayed completion deal, could not one get a conventional mortgage at the done up value? Is getting keys at exchange in breach of an arm length sale?
questions are always welcomed, so thanks and I love producing these videos for people to learn and enjoy
The basis premise that mortgage lenders work to is that, at the point of purchase, their lending is based on the lower of the value or purchase price. This means the higher done up value will be ignored and the mortgage will be based on the lower purchase price. So certainly you will be able to get a mortgage but you will leave a typical 25% deposit plus all your refurb costs stuck in the deal. When you use a Done Up Value Bridge you get most of that cash back out on the day you complete, then you remortgage at the done up value too because one you own the property mortgage lenders are less dogmatic about the purchase price you paid although you still have to present their valuer with a robust case for the valued you have added.
When you get the keys at the point of exchanging contracts and defer the completion for a few weeks longer than the standard 28 days, that in itself does not breach the notion of an arms length transaction. For purchases stuck in a chain there can often be delays similar to the delay you are using here. Moreover, when you are using bridging, mortgage lenders are not involved in the purchase, so their notion of the arms length nature is not a factor.
Kevin Wright thank you! It all makes sense. Thanks for taking time to get back to me. Much appreciated
@@planum412 - no problem
Hi kevin hope your well atm I love your videos! What are your thoughts on buying property in this current climate? Is it best to let the dust settle for the foreseeable future or is it a grab it by the horns situation?
very well thank you Michael and I am pleased you are loving my videos. During the lock down, it is more difficult but not impossible to actually buy properties anyway, as all the component parties in the buying process grapple with how to operate virtually. We are seeing that some but not all agents, brokers, lenders, valuers, solicitors have adjusted how they can operate in a virtual capacity. Post lock down will see greater opportunities for sure.
Whether to dive in or sit and wait is in part going to depend on what you intend to do with any property you would purchase. Will property values dive and take some time to recover or bounce upwards more quickly is the interminable question isn't it? Doomsayers abound but are they right, or just scaremongering? It seems difficult to predict that with any degree of accuracy.
You could look at dividing your question into during and post lock down. During lock down can be a great time for identifying buying opportunities. After lock down care should be taken to be as accurate as you can be about done up values of any project you take on, factoring in a contingency for soft rather than buoyant prices.
A quick buy, refurb and sell again deal would be more exposed to a post lock down slump in prices. were one to occur.
A fairly extensive structural refurb or conversion project that will take several months could be something to get stuck into if it can be bought at a favourable price, giving you time to let any dust that may settle, settle. Also something to factor in is whether you intend to sell on the project or keep it, refinance and rent it out.
The demand for rent is going to remain strong for simple supply and demand reasons. Fortune favours the brave is a saying but pragmatism and mitigating the downside risk of any purchases far as you can would seem to be prudent.
Kevin Wright much appreciate the length and detail of your reply it was insightful and clarified a few of my suspicions, you are the man! Will you still be acting as a finance broker after lockdown? If so could you please point me in the direction of how to get in contact with you that would be great thanks.
@@michaelgregory9233 - I always aim to add value, so I am glad you got some in this instance. We have been brokering for over 20 years and have no plans to stop anytime soon. Here are my contact details
07889 526979
inspireme@thinkpositively.co.uk
Michael Gregory Kevin’s the man! Out of most of the property guys on UA-cam, I think Kevin provides the most in depth knowledge, I’ve learnt a lot just from his videos!
@@hakimvlogs6579 that is very kind of you to say so, thank you
Hi Kevin,
I've gone through the video a few times and it seems like the explanation for both a purchase bridge and market bridge seems to be the same. I am correct in assuming that a market bridge will lend on the market value and not the purchase price regardless if the purchase price is higher or lower than the market price.
Mark?
A Purchase Bridge and a Market Value Bridge are not the same Ash, let me spell out the difference between them and see if you get it in a way that you did not get it by watching the video several times -
A Purchase Bridge lends on the lower of the value or the purchase price
A Market Value Bridge lends on the lower of the value or the asking price
That definitely is not the same thing
Lets say a property is for sale and the asking price is £100,000 and its market value is £100,000 too - but, because the seller now needs a quick sale they are motivated to let someone who can buy it quickly buy it cheaper, and your lower offer of £80,000 is accepted. So lets check those numbers -
Asking price - £100,000
Market value £100,000
Purchase price - £80,000
Lets work on both types of bridging loan lending 75%
A Purchase Bridge lends on the lower of the value (£100k) or the purchase price
(£80k) - £80k is lower than £100k so the Purchase Bridge lends 75% of £80k = £60k
A Market Value Bridge lenders on the lower of the value (£100k) or the asking price (£100k) - both are £100k so the Market Value Bridge lends 75% of £100k = £75k
So if a Purchase Bridge will only lend £60k but a Market Value Bridge will lend £75k, on the same property being sold for the same price - they are different and not the same.
Hope that helps Aah
@@KevinWrightProperty Cheers Kevin makes sense
@@ashramtohul5082 - good, glad that it makes sense now Ash
Do bridging companies lend money for the deposit and refurb on a property only?
Property to be purchased through a limited company with a mortgage in its name.
Is this possible ?
Good question Edson, the answer is it is absolutely not possible. When you buy with a mortgage you use up all the available equity a bridger would lend on, so there is nothing left for them to lend. This means, if you have already borrowed 75% of the value of the property using a mortgage, the bridger is not going to lend you anything on top of that, as it is too risky for them.
Using a Limited Company or not is irrelevent to the question, it makes not a jot of difference here.
If you want to borrow using a mortgage, then borrow the deposit and refurb costs as well, that indicates you have no cash of your own or access to any cash - that isnt going to work.
You need to re-think how you are going to get into buying investment property without putting any cash in - bridging is not the answer here.
Hello please advise who are these bridging loan companies? Are they part of the high street banks. Thanks
They are most certainly not high street banks nor are they subsidiaries of high street banks.
Hello Kevin Thanks.
@@NoName-jq7tj - welcome
I am unemployed but I have a property with £100k equity. Could i use cross collateral bridging, refurb the property then bring in a JV partner who has an employed income when it comes to refinancing to a BTL mortgage?
depends on the value of that property with £100k equity in it - what is it worth?
@@KevinWrightProperty £170-£180
@@healthiswealth8153 - here is the calculation
£170k x 65% (max ltv on 2nd charge) = £110,500 - less £70k mortgage = £40,500 of usable equity for cross collateral bridging use.
Hi Kevin, digestiing all the information in your youtube videos..All very insightful..
My bro is interested in addind value to his BTL by extending it from a 2 bed to a 4 bedroom but he's got no cash to do this.
How do you suggest he can finance this?.He's only got about 40k equity on the property.
Thank you.
Hi Segun, glad you like them. Not an easy solution to this. His mortgage lenders will only consider lending him more money after he has done the work, not before. No bridger is going to lend to him as he has insufficient equity in the property. The only real option is to borrow privately. Before doing that, he should check how much value 2 extra bedrooms will add, do they all meet the local councils minimum room size regulations, will his mortgage lender give him a further advance to repay the private borrowing.
@@KevinWrightProperty waoh what a quick response from you..Much appreciate this info.Will pass it on to him.
I havent seen anyone that answers people's questions on social media platforms like you do in a detailed manner without a dime.
Just like you do on all the property forums that I am on facebook.
Thanks a lot.
@@SegunA887 - no problem, keep following me on the sm platforms. I would a appreciate a little bigging me up to others in property when you get the chance.
@@KevinWrightProperty Most definitely.
@@SegunA887 - thanks
U have my father's full name😂 and thank ypu
:)
I was surprised at how much it costs for bridging finance, I was expecting it to be more expensive
so what you really mean is - you were surprised at how little bridging finance costs in reality
@@KevinWrightProperty yes
@@healthiswealth8153 - great. when you are ready to use bridging, we can help you get the right bridger for you deal