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Tag: mortgages

Jan
29

Auction Finance – Solutions For Quick Property Purchase

Property developers attend auctions to weed out some of the best investment opportunities available. Auctions, however, present a multitude of complexities that do not come with mainstream property purchases.

Financing an auction property can bring with it headaches and technical problems not seen in traditional property purchase scenarios. Auction finance is specifically geared to deal with these issues.

 

Auction Finance – What’s the Difference?

Most commonly, auction finance is a form of bridging finance. It allows the property purchaser some breathing space to get more traditional forms of finance in place.

In some cases, the finance must be completed quickly to secure the auction sale. The loans are usually secured against the property that has been purchased or other property that the developer already owns. The idea is to make the funding available as quickly as possible to allow completion.

Funding can be confirmed within hours. This is in complete contrast to the days or weeks that financing can take in traditional situations. The process is less onerous, and lenders will be more interested in the security available.

Auction finance sources will also lend to individuals who are self-employed as well as limited liability partnerships, limited companies, partnerships, sole traders, and employed individuals. Their scope for consideration is far wider than the average high street bank.

 

Not Just A Bridging Loan

Auction finance does not always involve bridging loans, however. When an investor or property developer sees a property they would like to purchase at auction, they can prepare financing ahead of time.

Mortgages and buy-to-let mortgages can be agreed in principle well before the hammer falls. This places the bidder in a position where they will know where their funding limits lie. Situations where the bidder knows their maximum bidding threshold places them in a position of strength.

Auction sales move very quickly. Especially for those new to them, it can be nerve-wracking and overwhelming. When the hammer drops, 10 percent of the price has to be paid up front.

Under most circumstances, the balances will be settled within 28 days. It is usually the 28 day period that necessitates auction finance in the form of a bridging loan.

If a mortgage has been agreed in principle and where it is being secured on either the purchased property or other assets, it is on rare occasions possible to finance immediately using a mortgage agreement.

To achieve this, you may need an experienced advisor broker. Your broker will know which finance companies work the fastest to ensure completion on time while still meeting all the requisite legal requirements.

 

Commercial Property

Auction finance is not only available for residential property. A business may want to extend its premises or buy new premises at a different location. If it is expanding, there may be good reason to buy additional properties.

Commercial property financing is also available under auction finance and is a good avenue to purchase value for money property. In the same way that individuals may want to seek a mortgage, it is probable that a commercial purchase at auction will require both bridging finance and a commercial mortgage to obtain the property.

If you are an individual seeking to buy a second home or a business purchaser for new manufacturing premises, good financing advice will be crucial. Established and reputable brokers will be well networked and able to find you a good deal.

Whether you wish to use a traditional lender or will need to find a private lender, Belgravia Property will be able to guide you along the way. For confidential unbiased advice, contact our London office.


Jan
19

Offshore Mortgages – Better Than A Well Kept Secret

One of the frustration that UK nationals living abroad experience is that the nature of their work dictates that they are non-domiciled. The dream of owning a home in the UK can become complicated without the correct advice. Offshore mortgages are very different products to ones offered to UK nationals that live and work in the UK.

Tax laws have been tightened over the last decade that also makes this area of lending even more complicated. A person can be resident in the UK, but non-domiciled. Having a UK-based employer that pays them in sterling may make obtaining an offshore mortgage easier. Even having a non-UK employer that pays in sterling into a UK bank account may make things easier.

The real headaches begin when the UK resident, that also happens to be non-domiciled for work purposes, is paid in foreign currency by a foreign employer. Add to this the complexity of fluctuating exchange rates and you’ll understand why the banks waver when offering offshore mortgages. Most offshore mortgages that fund property purchase inside the UK are funded from lenders based in the Channel Islands.

 

Offshore Mortgages – Varying Terms

Offshore mortgages are not regulated by the FSA, and before accepting one it is important to check with both your broker and tax advisor how vulnerable you are. Privately funded property purchases are essentially contracted in a way that the contracts can vary from one deal to the next.

This means that there are few hard and fast rules about how your funding agreement will be structured. For most that take this route, the convenience and access to funds combined with the expected long-term investment outcome more than sufficiently compensate for this.

 

Foreign Residents

UK resident non-domiciled British nationals are not the only people that seek out offshore mortgages. Foreign residents in Britain may struggle to find a high street bank to finance their property purchase. Anything from abandonment risk to loss of residence status makes the mainstream shy away. In fact, very strict internal regulations, as well as regulations dictated by the regulatory bodies, can make funding a property difficult. This applies whether the person is a high net worth individual or a foreign company or organisation.

It’s hard to tell what kind of impact Brexit will have on this market. The face of immigration and emigration is surely going to change. How it affects the property market is yet to be realised. Speculation can and will affect product availability but will not shut it down completely. The property market is here to stay whether it is buoyant or somewhat deflated. All lenders, whether they are private financiers or high street banks, care primarily about two things. The value of the property and the capacity of the borrower to pay the mortgage.

 

Non-Resident – Non-UK Nationals

Another group that is often forgotten when it comes to offshore mortgages are the non-residents. Non-UK nationals that are also non-resident but have a vested interest in purchasing property in the UK also struggle to find property finance. This may be for an investment or for a longer term plan to eventually settle.

Foreign companies based abroad may also fall into this category. Offshore mortgages are particularly attractive to these groups and they make excellent prospects for private finance lenders.

Because offshore mortgages are a specialist product, it is unwise to try and negotiate the terms yourself. It is a good idea to find an experienced broker that will not only find you the best funding source for your circumstances but will also be able to negotiate the best possible terms.

 

Seek Advice

Belgravia Property Finance offers advice and access to funding that may otherwise be difficult to find. Access is offered to UK nationals that are resident but non-domiciled. This includes expatriates living abroad. This group includes non-UK nationals and companies living or operating in the UK. Additionally, foreign individuals and companies that neither live nor operate in the UK.

To find out whether you would be able to access alternative property funding, contact the professionals at Belgravia Property Finance to make a confidential enquiry.