Buying a new house or office is stressful enough. But, buying a property from a builder who has not yet completed construction always gets Chevron plus a little more. I await your Premium)-Set Galump as you have planned all through the planning and designing stages. Now, you need to make the financial decision to buy the property, and with finance, as the priority choice, most people seek a bridging loan.
The roaring economy has made everything from gold to cars to wine from trees practically overnight. In the last few years, Nama hasn’t meant a great deal for the little guy. Nama, the business of the buy to let market, is booming longer than any other, from cars to high-rise buildings to retail and everything in between. Nama’s, in fact, represents a teen, especially the large bank with which Nama has dealt, will now try and slice a slice from the massive global banking and investment markets.
You might think by now that the banks need each other and Nama in particular.
Yet the little guy has many needs as well, and the Nama group needs banks to get their income going. So how and where do the banks and the Nama group fit into the equation?
Bridging loans are loans for a period of up to two years. The concept is relatively simple. Banks lend you money for a property, and you will want to either buy the property or at least put some kind of improvement in place. All of the money is lodged into one account, managed by your solicitor, and you only pay interest on those amounts.
So you achieve this by essentially giving the property on rent to the bank and having a mortgage on the property you purchase. The banks then use the rent from the property to pay back the loan. However, they will eventually take the loan themselves as your mortgage is secured by the property itself.
This means that you end up getting finance from Nama, or the bank, from either the equity in your property or that held in the property you purchase.
Bridging loan deals are much more manipulated than first appointments suggest unless you’re a cash buyer. Your solicitor will at all times keep Nama informed of the status of your mortgage, which is something that neither the lenders nor the SBA will do. This is so that you can arrange offers at the best rates for the property.
Bridging loan deals can also provide Flexi Funding, which allows you to get funds based on the amount of money you have or the current value of your chosen property. However, it is to be remembered that all the money is locked up in the physical property, and you might have to pay a good interest rate as well.
Getting ready to go for steadier loan offers in the future is also important. You will want to have all the relevant paperwork ready, such as your valuation contract. There are some lenders who will allow you to borrow up to 70% of the value or purchase price of the property, and they will lend you the outstanding balance as a second mortgage. Beware of penalties. Once you have secured the deal, what’s next?
The Big One – Conveyancing.
It’s an integral part of your new property and one that most people don’t take into consideration until you start getting offers. Conveyancing is the legal process that must be carried out when this transaction is complete and each party (B/S-builder, S/E-seller, lender) must make sure that all the details given are legal and above board.
At the same time, you will want to ensure that you have indeed attracted the most competitive interest rates in the industry. Because traditionally, the last thing a building society wants is to have another mortgage on their books. If you can get into one of the larger building societies, you will almost certainly get a superior rate and the peace of mind that goes with it. As a specialist mortgage broker, I am able to offer a number of wholesale SVR lenders, many of whom offer straightforward, straightforward bridging loans.
In conclusion, there will be an array of lenders out there for you to speak to, so long as you decide to initially put some work into ensuring your property has the best possible chance of a sale, you will reap the rewards when the property is finally sold at the right price.
