Light Refurbishment Buy To Let
This involves buying a property that you want to rent out that is in need of light refurbishment
We have a lot of clients inquiring about purchasing a property in need of refurbishment and want to obtain a mortgage to allow them to do this.
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In the current climate, obtaining a mortgage on a Buy to Let is more difficult than it was 3-4 years ago due to the Government imposing tougher criteria on how much they will lend since the introduction of the new tax rules and stress testing. If you add the fact that the property is not fit to rent out in its current condition, then it becomes even harder to obtain a loan against it. This is why it might be a good time to look at property that is for sale that needs some minor attention to bring it up to a mortgageable condition, because other potential buyers might struggle to obtain a mortgage on such a property.
The seller may have to reduce the selling price in an attempt to get it sold. This would put the potential buyer in a strong position to purchase the property, refurbish it which will increase its value and then rent it out.
We have the solution to the above situation which would allow you to borrow up to 75% of the initial purchase price, and once you have refurbished it and increased its value, then be able to drawdown further funds up to the difference between 75% of its new value and the initial loan you received. In a lot of cases, the further drawdown can cover the costs of the refurb plus reduce the amount you put down for the deposit creating more equity in the property.
Top Tip
It is always a good idea to regularly review your current situation concerning your properties and how they are financed.
If you are considering looking at buying a property in need of attention and would like to find out more how it works, then please don’t hesitate to contact us to discuss!