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Adam Hosker

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  1. Freeholders setting up leaseholds, try to get extra value with high ground rents. Enabling them to later sell the freehold for significant sums. Unfortunately for them mortgage lenders have grown wise to this issue and have stopped (in general) lending on doubling ground rents. A lot of freeholders have not caught up with the reality of the situation.
  2. If there are other people in the wings, a cash purchase may be prudant or if you can get a significant discount. Otherwise its more hassle than its worth if you are going to end up with a mortgage anyway @jamesduncan If you intend to live in the property. Remember to discuss it with an FCA Authorised Mortgage Adviser, that is Whole of Market. Such as the team at Bespoke Finance.
  3. It's not impossible. Though has some difficulties due to the funds being loaned. You should caution your uncle that it could well be longer than Six Months. Many mortgage lenders do not allow you to refinance within six months of purchase.
  4. The traditional ways are to purchase cash or with short-term lending (bridging). You outline its not feasible to do it in a Buy-to-Let Mortgage (due to ERC when refinancing) and that is true for most mortgages. Though the reason Property Investors dont do it and stick with the BTL. Is that refurbishment of property on a Buy-to-Let Mortgage is prohibited. The whole affordability is based on rent coming in to fund the mortgage payments. Not only that but renovation can effect the security and be viewed as high risk. The way Buy, Renovate, Rent, Refinance, and Repeat (BRRRR) is done is in two stages acquisition and refinance, not forgetting having cash aside for the renovation. The acquisition is usually with Bridging Finance or Cash. The refinance is on a Term Mortgage, typically with a lender that allows refinance within six months and takes a view on the new value. Many lenders will not move from the purchase price, others will do purchase price + renovation costs and others will do a new valuation. In 2020 - we also have some bridge-to-let products. Whereas before you would typically use two different lenders (for acquisition then refinance). Now we have lenders that offer both, in one package. This is useful as it saves some costs, (almost) guarantees an exit and gives you an idea of the final exit valuation.
  5. Hi Richard Virgin Money are fine but lowest market rates, for personal name 2 year fixes is a contest between TMW, Barclays, Natwest. Though not the same contenders for best "True Cost" over the two years, given fees, cashback, etc.. Your best route to get the best mortgage, rather than "best headline rates" is to talk to a Specialist BTL Mortgage Adviser. That becomes more true when you look at the surrounding criteria if that is the Property, Tenants or Yourself. Often the leading mortgage products are not available for all circumstances. As lilla suggest the current bread of online comparison sites, are dreadful.
  6. It's a regulated activity being raising finance on your home. So you should seek some personalised financial advice from a FCA Authorised Mortgage adviser. They can outline to you the risks and look at the options. Further Advance is great, typically if you are stuck with the lender on the Initial Rate with some ERC's. Though not always, especially if you are close to the end of the initial term and especially if you are on SVR. As a full remortgage could be better placed, giving you better rates on your mortgage. There are other alternatives too such as a 2nd charge loan. Where these come in often best,where the intent is to repay the loan in the short term. Lenders treat further advances differently - in general, it is less paperwork, but they may require a re-valuation and full application to check against current criteria. Unfortunately, further advance products may not be as competitive as other lenders, or the lender's remortgage products themselves. The "biggest risk" is that you are putting your home at risk to purchase a property investment, that may fail. You may loose that money in the Buy-to-Let if your plans do not come to fruition. Leaving you with a large mortgage on your residential property that you have to meet to maintain living in the home. Longer Hours, Working Longer in Life, etc..
  7. Im not sure where you heard they are becoming more common. They where very common but changes in Mortgage Interest Relief has made them rather expensive and the PRA Rental Stress Tests made them available to only the high yielding properties. Though that is not to say there is not better availability. Many years it was just one lender offering, we now have a few. You do not need Buy-to-Let Experience but you do need to be a homeowner. Though experiance is required for 85% LTV HMO Mortgages. Its not difficult to get at 85% LTV Mortgage, the main thing is making sure you have good rental income. As the stress test has to reach a larger loan amount. Perhaps - there are more lenders available now. Though you should really aim to build up 5% Deposit and get in the more competative 80% LTV space. As there is no guarantee that you or the property, will meat the criteria of the other view offering the mortgage. Leaving you trapped on the SVR (which is not low). A higher rental stress test. They want to ensure they have good security, given the higher risk. You do get lower Rental Stress Tests in a SPV than in a Personal Name. Otherwise not much difference in the general sense. I would suspect not. We have some competition in the space but most landlords avoid 85% LTV in my experience. You do have some landlords that do use it to their advantage for leveraging and building a portfolio. Though given the higher rates and product fees, even they generally aim to build at least 5% deposit by time the next remortgage comes. Otherwise your net profits will be hit by the fees and rates. We wrote an article a year or so ago about 85% LTV Buy to Let Mortgages that may answer some of your questions. The TL:DR of all these questions is that is just the same as other LTV Mortgages. Though reduced choices, higher rates and fees. You will need to have a good rent on the property to make sure the maximum loan the lender offers is 85% LTV.
  8. Mortgage Lenders do not like Freehold flats, as their is no clear way to sort shared issues. Perhaps the roof needs sorting, or a structural issue with the wall. A freehold flat would require consent of all to come together and fix it. Whereas leasehold has it written in contract that all should participate, or what percentage they should participate. There are lenders that do entertain mortgages of Freehold Flats, Bespoke Finance has done a few in its time. Its the way many units were set up. If your broker is coming up blank, then would be happy to help with the contact details in my signature. Though if you have a freehold flat, on one floor with no property or other flat attached to it. You have a freehold bungalow? no?
  9. You can work with a mortgage broker to test your requirements, a few points to remember when you do. Mortgage Product v Mortgage Product Not all mortgage products have "arrangement fees" at all, never-mind £1k. Though its not a freebie, its a trade-off with higher rates. Its not uncommon for the same lender to have two like-for-like products except in the way - one has fees and low rates, the other has no fees and higher rates. Which way to proceed depends on your circumstances. Personally I prefer to ignore fees & rates (where possible) and recommend the product with the least "total to pay" over the initial rate term. This compares both the products adding up fees, rates, etc... over say those 2 years and presenting one as the least expensive over that period. Mortgage Consolidation If you want to keep your total fees low. Obtaining 6 low-ltv mortgages at 2% each with a £1k fee can add up. Perhaps it is better to get 3 mortgages - compared these would be at higher LTV's higher rates but reduced fees. In this way you are viewing equity on your portfolio as a whole and not as individual properties. The wise property investor would too reduce the mortgages to NIL on the higher rates properties (non standard construction, hmo's, holiday-lets, etc..) Also You may find it difficult obtaining finance with just £25k borrowing. All lenders have a minimum loan amount and many are higher than £25k. You can find contact details in my signature to Buy-to-Let Specialist Mortgage Brokers where they can go through the options with you.
  10. You would typically use a short-term loan (aka bridging loan) to raise the funds to purchase your new home. The bridging loan paid off in full when you sell the original home. Many do not have that flexibility and would look to do a "chain" purchase. Where their are multiple purchases and sales, taking place at the time time.
  11. That determination is not black or white its a bit grey. Lenders implement the rules there own way. I wouldn't worry about being classed as a portfolio landlord or not. It's just a bit more paperwork that the lenders typically ask for anyway. As lenders do their checks anyway, it was one of those regulatory things that was built up and when implemented came down to not much difference. You do have lenders, that have caps of background properties (though they always had). The same applies, some ignore background BTL in a SPV and others do not.
  12. Yes (see signature) - Typical Fee is £495 but can be lower depending on whole situation. You should not be paying £1,495 @adrian b to John Charco. That's a fee that shouts they do not want your business. As you outline a lot of the market leading deals are Mortgage Adviser only.
  13. This old topic may help you - Inheriting into a LTD Company.
  14. Conveyancers are important. You just use them regularly and often change, given the mortgage lenders panel. I can see that but its not really in a brokers interest @row to recommend a crap conveyancer, they are paid on completion. In addition SRA rules outline that referral fees are highlighted on conveyancing quotes. Though they do often "recommend" crappy conveyancers, as many mortgage deals comes with "free conveyancing". Where the lender has negotiated a deal with a firm. These are notoriously terrible.
  15. They are all important in there own ways? Conveyancer perhaps least probable to require to build an ongoing relationship. You use them irregulary and often change, given the mortgage lenders panel.
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