Bridging Finance

Can I get a bridging loan on any property?
In principle yes, you can get a bridging loan on virtually any property.
Can I get bridging loan for a property i’m buying at auction?
Yes. Bridging finance is often used to help buyers to meet the 28-day payment deadline included in most property auctions and to bridge the gap until they can arrange a longer-term mortgage.
Is a bridging loan expensive?
As a short-term loan, you typically pay a little more for a bridging loan than a standard mortgage, but it doesn’t need to be prohibitively expensive.
Is there a set time limit?
Bridging loans can’t exceed maximum time limits, this is 12 months for a regulated bridging loan (ie residential) and 24 months for a non-regulated (non-residential) bridging finance loans. However, you can pay it off as soon as you have the alternative funds in place.
What is regulated bridging finance?
Regulated bridging finance is where the person borrowing the money live, or have lived, in the property that we’re trying to secure funding against.
What is non-regulated bridging finance?
Non-regulated or Unregulated bridging finance basically covers everything else, from commercial units to land or development funding.

Commercial Mortgages

How long do commercial mortgages last?
Commercial mortgages will be taken out for a period of 3 to 35 years.
What happens if I need a commercial mortgage for just a short period of time.
Shorter periods tend to be serviced by a bridging loan, property loan or a commercial loan. These can be for between a couple of weeks up to 2 years.

Specialist Lenders

Do Specialist Lenders comply to the same rules as high street banks when it comes to getting a mortgage?
Specialist lenders are still subject to the same rules as high-street banks under the Financial Conduct Authority (FCA) and Mortgage Market Review (MMR) introduced in 2014. This means any potential borrowers are stress tested 3-4 percentage points above the lender’s standard variable rate (SVR) to see if they can afford repayments if interest rates were to rise. Together with manual underwriting, this ensures the borrower is safe to lend to.

Bad Credit

Credit Scores – What is it and how does it work?
Your credit score gives the Mortgage Lender an idea as to how well you or do not manage money and the level of risk they are taking if they give you a mortgage.

The lower your score, the higher the risk lenders will consider you to be.

A Mortgage Lender will look at your credit score as well as your ability to make repayments before deciding whether to approve any mortgage application.

Mortgage Lenders will generally get reports from one of the Credit Reference Agencies.

Who are the Credit Reference Agencies?
Generally, they use reports from one of the two main credit reference agencies (Experian and Equifax)
What impacts your credit score?
  • Your current level of debt
  • Whether there have been any issues with repayments in the past, have you made payments on time and for the minimum amount.
  • Whether you have had any late payments (or missing payments)
  • If you have been declared bankrupt, or have an IVA (stands for Individual Voluntary Arrangement), part of a Debt Management Plan, have a Debt Relief Order in situ – or if you have had any of these in the past if you have been discharged from them.
  • If there are any County Court Judgements against you – often referred to as CCJs, if yes, how long ago they were issued.
  • The number of credit applications you have made in the past and over what timeline.
How long does the impact of an IVA (stands for Individual Voluntary Arrangement), being part of a Debt Management Plan, having a Debt Relief Order in situ or a CCJ have on your credit report?
Some of these will have a greater impact on your credit score than others, and although none stay on your credit report forever, some will take 6 years to be removed and there are still some Lenders who have a policy to never lend to you.
What happens if I have no credit?
Not having a credit history can have a negative impact on your credit score in just the same way as late payments. Often this is the case with young people, or people who have moved to the UK from another country because they haven’t had time yet to build up a good one.
What is a good credit score?
Each Credit Reference Agency calculates your credit rating differently. It is not as simple as saying if you have this score / rating it is good or bad.
Do Specialist Mortgage Lenders credit score?
Not all specialist Mortgage Lenders credit score, so if your score is not great – do not panic, let us do the research and advise you accordingly on how best to proceed with your mortgage application.
How to Improve Your Credit Score

There are plenty of ways in which you can do this, our advisors are happy to share with you the ways in which you might try in order to see a difference:

  1. Check your credit file

    It is a good idea to check your credit file and score and review the information held in your credit file regularly. This way, you’ll be able to see any improvements and know when you will be able to apply for a mortgage.
    Look for errors on your report, including potentially fraudulent activity and report these straight away to the credit agency and any lenders.

  2. Make sure you are on the electoral roll at your current address

    Having your name included on the electoral roll makes it easier to get credit as lenders see it as a sign of stability; that you have a permanent address which you are happy to share.

  3. Make repayments on time to your credit cards / bills

    Late payments will have an impact on your credit score, although the impact does lessen the older they are.

  4. Reduce any existing debt

    Your advisor can talk you through which of your existing debt you might try to reduce before applying for a mortgage. The lower your debt levels, the more likely you are to be approved by lenders of bad credit mortgages, even if you can only reduce the amount of debt by a small amount.

  5. Start building up your credit score

    As counter-intuitive this might sound, it is possible to have a positive impact on your credit score by taking out a credit building credit card. Make small purchases and pay off at least the minimum each month if you can pay it off in full. Do not do this if you are applying for a bad credit mortgage within the next few months as each card application will appear as a hard search on your credit report.

  6. Stop applying for credit

    The more applications you make, the worse this looks to lenders as they see it as a sign you aren’t in control of your finances. If you apply for credit and get turned down, do not go and apply somewhere else this will damage your credit further. If you want to find out if you are likely to be approved, only complete soft searches as these won’t show up on your credit report.

Non-standard construction

What is a property of non-standard construction built from?
A non-standard construction mortgage covers anything from prefabricated steel properties, flats above shops, wood/timber properties, and can even cover properties with concrete or glass walls, or thatch and eco-friendly roofing. Each lender will have a different set of standards.

Limited Company Buy to Let

How do I set up as a Limited company for Buy to Let purchases?

Setting up a limited company is simple. You can register with Companies House online or by post and it costs from just £12.

Here are the key things you’ll need when registering your limited company.

  • Company Name and Address
  • You’ll need to create a unique company name – you can check it online against the current register
  • The address can be your residential address
  • Directors and Shareholders details
  • You need to appoint at least one Director of the company
  • You can add additional Directors and/or a company secretary
  • Each shareholder should be allocated a percentage share of the company
  • Any shareholder with a holding greater than 25% is a Person with Significant Control (PSC)
  • Each PSC’s name, month and year of birth, nationality and service address will feature on the public register
  • Definition of Business Activity.

You should always speak to a qualified accountant about the type of company you’re creating. It’s also worth asking your tax adviser whether the company should be a Special Purpose Vehicle (SPV) and for them to recommend the correct SIC code to use.

You will also be required to seek independent legal advice.

  • Once Your Company Is Registered:
    You must register for Corporation Tax within 3 months
  • You need to set up a business bank account

Later Life Lending

Who is eligible for Retirement interest only (RIO) Mortgages

Retirement Interest Only (RIO) mortgage are available for homeowners over the age of 55. Lenders will judge the mortgage affordability based on income through your retirement. They will consider incomes from your Pension, Investments, or Buy to Let income.

What is Equity release?
Equity release can assist your income in retirement. Funds can be taken from your existing property for many uses with options to either pay a monthly payment or allow the interest to roll-up.
What is the equity in your home?
Your home equity is the value left over after all charges are deducted from the full market value of the property – i.e. your mortgage, including any second charges that are assigned to it.

Buy To Let

Do I need to pay stamp duty land tax (SDLT) on a buy to let property.
If you buy a second property that is not your main residence, you will have to pay Stamp Duty Land Tax (SDLT) on it. The amount you will pay is dependent on the purchase price of the property as detailed below:

Need more help or have any questions?

We need to be honest with you… Your home may be repossessed if you do not keep up repayments on your mortgage.