Popular Product: Bridge, Gain Planning and Refurb.
A popular product we have noticed over the last month is bridge, gain planning and then refurb to the higher value.
For example, our client purchases a house for £200k, gains planning for a HMO, refurbs at a cost of £50k to a 9 bed HMO, end value is £450k.
How it works?
1) A bridging loan for the purchase - 70% LTV, 0.7% per month, 9 month term.
2) Once planning is in place, the bridging loan is then converted to a refurbishment loan. The lender will fund 100% of the refurbishment costs.
3) £50k refurbishment facility to fund 100% of the works. Rate 0.7% per month. Fees are only charged on additional borrowings.
The major benefit of structuring a loan in this way is that you are not charged on the refurbishment funds, until they are needed. Therefore if planning is declined, you won’t be charged on them at all.
If you would like a free quote for your next project, get in touch with the RFL Team.