Mayfair Group
Global Investments – Local Reach
Mayfair Group has developed a unique and simple way for investors to capitalise on the Global Real Estate downturn.
We Specialise in hands free investments that can provide investors Gross Yields of up to 25% per Annum. Our Investment properties offer up to 50% equity from day one thus giving our investors strong return on investment.
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Property Finance
Bridging Finance and Loans - Here is a quick guide to Bridging Finance
Bridging Finance - Here is why you would need bridging finance
Bridging Loans - Cost of Bridging loans
Buy To Let Mortgage - The basics of choosing a buy To Let mortgage
Investment Property Mortgages - Basics of mortgage financing.
A quick guide to Bridging Finance and Loans
Business finance, also commonly referred to as bridging loan, is a fast way of raising interest only finance for a variety of uses. The finance facility is normally used for property purchases and the bridging loan is normally secured on property, or land, which may be commercial or residential.
Unlike mortgages and loans, bridging finance lenders will normally lend to people on a non status basis. This is because the security of a property or land is enough for the lenders and they will normally lend up to 75% loan to value on a first charge basis or 65% on a second charge. The amount given is based on the true value of the property.
Additional amounts of up to 100% can be borrowed if additional security is given. The amounts that can borrowed range from anything from £25K to £5 Million plus.
The terms of the bridging loans vary I accordance with the requirements. A typical borrowing lasts a few months and can go up to as much as 12 months.
The finance can be made available quickly by a lender, and it is not uncommon for a borrower to obtain funding in as quick as 48 hours.
The repayment of the loan is normally arranged by the sale of the purchased Investment Property or with the arrangement of a mortgage to pay off the loan. Bridging loans are more expensive than mortgages and it is advised that they are cleared as soon as possible.
Only a few principal lenders lend bridging finance. You can visit the Bridging finance site to submit an application.
Here is why you would need bridging finance
Bridging finance can be used for a wide range of purposes that range from borrowing for a investment property purchase to raising finance for property development, or just needing to raise money for any other reason.
The common use for a bridging is to raise money for the purchase of a new property, until an existing property has been sold. The lender uses the property to be purchased as the first charge security and places second charge on the existing property. The loan is repaid with the sale of the existing property and a mortgage on the new one.
Investors also commonly bridge to raise money for buying Investment Property at auction, overcoming mortgage lender retentions and purchase of property in a refurbishment project.
Other situations where a borrower will want to raise money quickly include, the need to buy a property that is being offered at a discount or completing the sale on a property when a sale of an existing property falls through.
Cost of Bridging loans
Arranging bridging loans is normally more expensive than traditional mortgages. A bridging loan is normally a short term option to fund an Investment Property and on average, lasts just a few months, whilst a mortgage can last up to 25 years.
Different bridging lenders will have their own rates and it is wise to analyse the rates of each lender carefully. A lower interest rate will not automatically mean a better deal. There would normally be other costs associated with the finance, which include some of the following:
Arrangement fee by the lender
Lenders fees vary between lenders and you can expect to pay between 1% or 2%. The payment of the fee also caries with lenders; in a majority of the cases the lender will expect to get paid upon completion and deducted from the loan, although some will ask to be paid upfront.
Lenders Solicitors Fees
These are fees incurred by the lender from the solicitors and will vary between lenders.
Interest Rates
The interest rates are agreed as per case basis and usually range between 1% and 2% per month. Fees on second charge properties is higher and can go up to 2.25%.
Redemption or Exit Fee
This is the charge that you should carefully look at to see if you are getting a good deal. Some lenders will charge this fee but offer lower monthly interest rates and some will not charge, but offer higher rates. The charging of the fees also depends on the duration of the loan. If you have the loan for a long enough period, the fee will not be charged.
Brokers Fees
Some brokers will charge a fee, whereas some will not. It depends on the agreement that the broker has with the lender.
Brokers Fees
Like traditional mortgage lending, the lender will require a survey to be done on the property for security. A survey may be wavered if you have already had one done and is acceptable by the lender.
What to Consider for a Buy To Let Mortgage
When looking for a buy to let mortgage, it is important to take into account a number of key factors to ensure that the deal you obtain is right for your property investment. Over the last few years, there have been a multitude of buy to let mortgage products that have been released by lenders to make investing in property easier. In fact, it is the availability of such a variety of buy to let mortgages that has fuelled the Investment Property market further. So what are the key factors that you need to consider when looking for the best buy to let deal?
Interest Rates - Firstly you need to look at the obvious factor of the interest rate on the deal you are being offered. Lenders will offer a selection of interest rates that will generally vary depending on whether the mortgage is fixed or a tracker deal. In a fixed rate mortgage, you are normally tied in to a deal for a few years whereas and the interest rate is fixed at normally a discount from the base rate. The catch is that if you wish to repay your mortgage before the fixed period expire, you are normally liable to pay a penalty, which is typically 5%.
A non tie in (variable) mortgage allows you to pay off your loan early, but will attract higher interest rates. The main point to consider when deciding between a fixed rate or a variable is to evaluate which way the interest rates are likely to be heading. If they are heading lower, then a variable rate will be the better choice.
Arrangement Fees – An arrangement fee is normally charged by a lender and added to the full loan value to be repaid as part of the installments. Enquire about the arrangement fee charges before you embark on a loan.
Valuation Fee – All lenders will charge a valuation fee, but this should not be a major deciding factor that determines whether you choose a product or not.
Before embarking on a decision to go ahead with a mortgage, it is advised that a reputable mortgage broker is used. Mortgage brokers have access to a wealth of information on the market and lenders so are a good source to help you select from a greater choice.
Investment Property Mortgages
IPM’S have developed a bad reputation since the crash and have put fear in the hearts of lenders, some have even gone so far as to remove this service altogether. What is an Investment Property Mortgages? It is a loan and most of them are for 100% investment property mortgage.
Now just looking at that should send up a red flag. Why? Because a smart investor does not buy at 100% of the market value, the goal is 80% or less. Too many investors and lenders were lulled into a false sense of security by thinking that demand would out weigh the availability of investment properties and so while a 100% IPM was a risk, they thought they would profit as properties would sell for more than they were worth. Whew! Bad idea! When the market crashed so did a lot of investors.
Bottom line here is Investment Property Mortgages can still work, but it is up to the investor to be smart do the research and buy under the market value. That is the only way to gain a profit and a solid investment portfolio.
We can be an integral part of your success. Our team has the best selection of properties from around the world. Our staff is not only knowledgeable, but experienced and committed to finding you the perfect investment. Whether it’s for the short or long term, real property or land, we have the best investment opportunities for you. Contact us today and let us help you turn opportunity into reality
For Further information contact us on info@mayfair-group.com