New 100% Finance Product – Purchase An Unlimited Number Of Bargain Properties No Money Down…
Property Finance
The single biggest question I get from property entrepreneurs is “how do I raise the finance to buy bargain properties?”. I’m sure it’s a question you’ve asked somewhere along the line and makes for an especially tricky problem if you do not have a team of private investors backing you.
There is now a quick and cheap solution in the form 100% finance based on the value of the property and not what you have agreed to pay (no matter how far below market value)…
This 100% Financing Is Achieved Through Something Called ‘Closed Bridging’…
Its totally legal, the lenders know what’s going on, costs are fixed.
How Does It Work?
It’s very simple and straightforward. You will end up buying the property (in your name) using someone else’s cash in the morning and then remortgage based on the true value of the property later in the afternoon.
This will allow you to then own the property having used none of your own money and 100% finance from the mortgage lender. This is in essence a ‘closed bridge’.
For example: You want to buy a property no money down worth £100,000 and you can get it for £80,000. You to apply for an 85% remortgage on the property based on its value of £100,000.
Once you have the valuation and mortgage offer you then proceed to the next stage. On completion day you will buy the property cash for £80,000 in the morning and then remortgage based on the true value later in the afternoon.
This remortgage releases £85,000 which pays off the £80,000 borrowed + interest Remember, you’ve put absolutely none of your own money down…
The Remaining Cash Is Yours To Keep.The Property Is Now Yours No Money Down.This Can Be Used On Any Property Anywhere In The Country!
“Why Bother With Closed Bridging?”
Closed bridging is particularly useful if you want to buy a bargain property without putting any of your own money down. To buy a bargain property yourself and remortgage later is a good strategy but you will need to put down a deposit for at least a few months.
Then you run the risk of not getting a high enough valuation from the surveyor which means you could have your money stuck in a property for many months with no way of getting the funds out.
Also, closed bridging allows you to complete on a property very quickly (once the valuation and offer have been confirmed) giving you an edge over your competition.
As you know, mortgage lenders usually lend based on the lower of either the purchase price or market value. If you are buying bargain properties, then you will not be able to borrow against the true value of the property giving rise to a delay in getting your deposit funds out.
“Sounds Good. Can I See A Case Study?”
Here is an illustration to show you how an example deal would work and what the rough costs would be.
Market Value of property £100,000
Purchase price (20% below market value) £80,000
Equity £20,000
Purchase Costs*
- Legal fees for purchase -£485
- Private finance charge 1% -£1,000
- Mortgage broker fee -£300
- Stamp Duty -£0
Total Costs -£1,785
Remortgage @ 85% of Value £85,000
Less repay bridging loan -£80,000
Less purchase costs -£1,785
Less Legal fees for remortgage -£485
Cash back after remortgage £2,730
Built in Equity £15,000
* The only other costs you would need to cover are valuation fees, insurance fees and telegraphic transfer. These vary from deal to deal.
Advantages Of Closed Bridging The No Money Down Way…
1. True no money down deal…
2. You’ll know the amount of remortgage money you will get before you complete on the property as the valuation will have been carried out before exchange…
3. Grow your portfolio as fast as you want no need to worry about deposit – buy an unlimited number of properties using other peoples money…
4. Save on stamp duty as compared to a gifted deposit. With this method you only pay stamp duty based on the purchase price not on the valuation…
5. Interest on full purchase price deductible against income from rent…
Here are some quick points to remember:
1. You’ll need to get the property at least 17% below market value to get you 100% no money down. If you don’t get it that much BMV and you don’t mind putting a little bit of money down then this will still work very well for you in exactly the same way as described above.
2. A fixed 1% of the funds lent (minimum £1,000).
3. Tax Advantage: by acquiring the property with a 100% finance you will benefit from having 100% of your mortgage interest payments allowable against your rental income for income tax purposes.
When you have a deal in mind please visit Property Finance
Kind regards
Manan Aslam
When looking to take out residential development property finance good information relating to the subject can be hard to find. The best place to get honest advice and help can be found with a specialist website. Along with explaining all you need to know to get you off to the best start possible a specialist will be able to secure you the best deal with the cheapest rate of interest.
Residential property finance is very difficult to obtain without all the necessary paperwork relating to planning permission. Before looking into taking out a mortgage it is essential that you have all the documentation in order. The majority of lenders will not loan money without this, a few could consider lending to experienced property developers who have an excellent track record, but in the majority of cases it is not a good idea.
When it comes down to interest rates for property development finance then these will vary considerably on the individuals’ circumstances. Factors that are taken into account include the project and size of it that you are proposing and how much the property is worth. As a very basic guide you can expect to pay a rate of interest somewhere in the 1.5% to 2.5% bracket along with the Bank of England base rate.
How much you are able to borrow for residential development property finance will also vary again on your circumstances. Usually this will be somewhere in the region of 70% to 75% of the value of the property in question. However this will be influenced by the loan to project costs and projected gross development values are taken into account. In some cases particularly if the developer has a proven track record it is possible for the broker to get 100% funding but in the majority of cases this would not be possible. As a result some thought has to be given as to how you would find the rest of the money needed to complete the project you are proposing.
Property finance can be confusing to the majority of individuals and getting the correct advice is essential to getting the best deal. A broker will work with those seeking finance and explain all the options relating to the type of loan they might be better off looking into.
When it comes to types there are is interest only mortgages and the repayment. The interest only will work out to be cheaper payments but when the term of the mortgage is reached there will be the initial loan to repay in full and again the lender will want to know you have the funds in place to cover this. A repayment mortgage will come with higher monthly repayments stretched out over the term. However once the end of the mortgage arises then you will have paid off the full amount as part of the monthly repayment will go toward the capitol and part the interest. The next decision will be taking out a fixed or variable rate of interest for residential development property finance and a broker will talk you through the advantages and disadvantages to both.
Property Finance
Property Finance
When it comes to the world of property finance, it is much more structured and different than a regular and run of the mill mortgage. For the most part, property finance is linked to development loans. Depending on which type of development is being done will depend on the type of property finance that will be attained.
Below is a list of the most common reasons why a business would choose to get development loans.
Residential development opportunities: This can be on a large or a small scale. Development loans can range from reconstruction to converting an existing building. Commercial development opportunities: Commercial lending for property finance would be assumed in this position. This is a project undertaking of more than one building, as well as used for profit purposes. This would also include large undertakings such as a mall and more. Trading property finance: This is when you buy property, improve and build on it, and then sell it for a higher cost and turn a profit.
In general, these are the development loans that would assume secure property finance. Knowing the difference between the three will help establish grounds for further understanding in which development loan you will be seeking.
In general, these are the development loans that would assume secure property finance. Knowing the difference between the three will help establish grounds for further understanding in which development loan you will be seeking.
In general, these are the development loans that would assume secure property finance. Knowing the difference between the three will help establish grounds for further understanding in which development loan you will be seeking.
http://www.businessfinancebroker.com/Business-Loans.html
In general, these are the development loans that would assume secure property finance. Knowing the difference between the three will help establish grounds for further understanding in which development loan you will be seeking.
