Lumi Bridging Solutions?
Finance for Property Refurbishment
Are you a property developer or Investor?
Once you have located and sourced a property most people are now in a position where they are working against the clock to ensure the property is in a condition to be able to let out so it can generate income. If you fall into this category where you have secured a property that either requires a face lift, conversion or an extension then securing a loan for purely property refurbishment might be a suitable option.
Explain Refurbishment finance?
These types of financial packages usually are shaped in the form of bridging finance. Historically, the majority of lenders would expect a property to be in full working order before sanctioning a loan. For example, the kitchen, bathroom and any other areas of the property, would need to be in working order that will qualify and pass as suitable for a tenant to occupy. In the event that this is not the case, bridging finance can be utilised as alternative to a traditional loan to carry out all these types of works, as this type of loan is geared to short term lending to help with quick fixes.
What you need finance wise will depend purely on the level of work the property requires. Do you require finance for light cosmetic work meaning painting, new carpet, flooring, kitchen or bathroom? Or would you be leaning to more heavy duty works i.e knocking through walls, changing the layout of rooms within the exiting property etc, or somewhere in between.
If you fall into category of ‘I/we require finance to complete heavy duty works’ then bear in mind some of this may involve changes to planning permission to allow works to happen. A lender will consider any structural changes as heavy duty works and you would need to submit proof that you have been granted permission to complete this works on the loan application.
Lenders may take up the option to grant you a loan to purchase the property and providing the entire financials stack up, advance you additional funds to complete the necessary renovation works. In cases like this, it is more than like their lender will send a representative to view the property before they decide to release further funds for additional works to be carried out. This is known commonly in the industry as development milestones. Once certain milestones have been completed then funds are released as the risk exposure to the lender becomes less.
Depending on the strength of the applicant and the project is favourable 75% LTV (Loan to Value) is a realistic projection to purchase a property. This means if the property is valued at £250,000 a lender may consider lending up to 75% of the value of the property (£187,500). After this you can then begin to factor in 100% cost arrears which are likely to be subject 70% of the property value once all works are completed. It is important to work with lenders that are prepared to offer:
Attractive interest rates
Rolled Up interest
Options with minimal exit fees
Terms from 3 to 18 months
100% funding if additional security is provided
Drawdown milestone payment facility
The percentages quoted above are gross loan percentages i.e. before interest and fees are deducted.
You will need to compile the basic information most lenders require to gain any loan approval. For an individual or Company these tend to be the following:
Property Details and any supporting planning information
Schedule of Works – This supports your business case for the property and exit strategy. This will include a detailed list of all works required to be done to the property and the main contractors that will be used to complete this.
Your background and property experience
Proof of funds (deposit) and any additional security available to secure funding if required.
As interest rates and fees vary from lender to lender before you enter any deal it is wise to try an obtain an illustration of what a potential deal may look like if you were to proceed with a loan application. In some cases it may be more prudent to use a broker who has access to the whole of market to find you the best possible deal. These are list of fees or considerations to factor in:
Product Fee – Usually payable on application
Valuation Fee – Usually payable on application
Funds Transfer Fee – Usually deducted from the advance
Loan Exit Fee – Usually 1% of the loan amount
Solicitors & Conveyancing Fees
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Bridging Finance to break that chain
Need a bridge until you can sell your current home, or simply release funds for another project.
Buy to Let Bridging
Buying at auction or a property for refurbishment?
A bridge can give you funds fast to complete that quick purchase.
Commercial Bridging Finance
Looking to buy a commercial property or need funds for another business purpose?
Borrow from £25,000 to £15,000,000
No matter how much you want to borrow, we will do our best to make it happen, without the fuss or headache.
Rates from as little as 0.37% per month
Lender’s rates change regularly, so we always scan the market to get the best rate for your specific circumstances.
Make use of our in-house accountants
Their expertise and experience are part of our service and at your disposal.
Helping you choose the right bridging finance for your home move or investment property
Find the right bridging finance at Lumi Bridging Solutions
Contact us today for your bridging finance, buy to let mortgage, commercial mortgage, bridging loan for house purchase, HMO purchase, emergency cashflow loans, auction finance, bridging loans for property development, bridging loan mortgage, business bridging loan, commercial development financing.
Bridging finance for your commercial or residential property
LUMI BRIDGING SOLUTIONS IS A TRADING NAME OF FEINGOLD FINANCIAL SERVICES LIMITED
Company registration number 05087823. FCA registration number 303451. Data protection registration number Z8766562
Registered office: 1st Floor, Swan Buildings, 20 Swan Street, Manchester, M4 5JW.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE SECURED AGAINST IT.