17 August 2014

Property Finance

Property FinanceProperty Finance

When the term property finance is used then it generally refers to the use of property as something other than for your own occupation. In recent years the options with property finance have changed and the lenders who operate in this sector have changed even more.

It is well worth looking at your options as they are probably much different from how they were a few years ago.

Residential Investment Property – RIP

Residential Investment Property loans are starting to become more widely available, albeit the high street lenders remain cautious. As a guide the following principles generally apply;

  • Loans up to 75% loan to value
  • Rental income should cover the loan interest by at least 120%
  • Properties to be let on an Assured Shorthold Tenancy
  • The loan is based on the property, rental and affordability. It is very much an isolated transaction

Commercial Investment Property (CIP) operates on a similar basis to the above, the main changes are;

  • Term of lease generally drives the term of the loan
  • The strength of your tenant is more important

For both these sectors there are several lenders in the market, many of these will not be available independently so it is well worth talking to us about your options. We operate a profile system which will look at rental income, property value and mortgage requirement, this means we can summarise your options within minutes of talking with you. This means you know your options quickly and can consider what is best for you.

It is easy to find out what for property finance options are, either call us on 01293 541333 or provide your details here and someone will call you within 24 hours.

Auction Finance

Property auctions remain popular and can offer a chance for a sensible investor to obtain a discounted property. The challenge of buying at auction is to know what you are getting and that you then only have 28 days to complete the purchase.

Auction finance is about giving you the ability to go to the auction with a pre-approved loan that can be drawn down to ensure completion happens inside the requisite 28 days.

  • Up to 100% loan to value is possible (you may need to provide other security)
  • Loan terms from 1 to 12 months
  • Often the valuation and lender legal costs are not passed on to you
  • Loans approved before the auction with details based on auction date and lot number
  • Interest charged each month, normally around 0.75% per month

Auction finance is something that we can offer that not every commercial finance specialist has available, the way it works and the cost really can be something worth considering. Call us on 01293 541333 or provide your details here and we will call you within 24 hours.

If you want a guide to the costs and structure of our property auction finance then see the chart below. Please remember that this is a guide and not a definite list of terms or an agreement to lend.

Auction Finance Structure

Auction Finance

Bridging & Development Finance

Bridging and Development finance are very similar in that they are both a short term thing. The term ‘bridging loan’ refers to what it is, a bridge to take you from one place to another.

Both bridging finance and development finance require an exit. This means that when the term of the loan ends you need to be confident what will happen next. With development finance this could be that the property works are complete and the property will be mortgaged or sold. With bridging loans then a similar situation exists.

  • Loan terms can be from 1 to 24 months
  • Interest charged monthly
  • A legal charge over the property in question is required
  • An exit plan needs to be formulated and proven
  • With development it helps to have some experience with running development projects

We will always help you identify and know how any bridging finance will be repaid, either through sale of property, re-mortgage or another option. Call us or use this property finance enquiry form.

Why Use Lime Consultancy?

In short, there are so many options out there that using us will save you a lot of time and effort. We will source the best property finance, tell you the terms, the positives and negatives then let you make the decision. It is all about making business finance simple, whatever that entails.

Please Note

The above is a guide to what is available, it is not a recommendation to do anything. All credit facilities come with terms and conditions which you should always be 100% comfortable with and aware of. All rates and facts quoted are general and will vary from lender to lender and from client to client.

For any questions then please contact us on 01293 541333 or use our contact page.