standard mortgage | Baya financial

Lenders do not assess the mortgage on affordability

This means that it doesn’t matter what the rent would be for the property in its current condition, they won’t restrict how much you can borrow based on that figure.

For example…

If the property is in poor condition, the valuer will give a lower figure of say £600 pcm. When it is refurbished you may be able to rent it for £800, but the £600 may not be enough to borrow the full amount.

The property can be in any condition, as long as you have a plan that works!

You don’t need a kitchen or bathroom, there can be structural issues, and dampness… the list is endless!

As long as you have a plan for the works, the funds to do them (and some experience if they are extensive) then we can do it.

This will open up the properties available to you, you aren’t competing with everyone else.

The property is appraised on your schedule of works and costings

We provide the valuer with your schedule and costs of work, so you will get the current figures, as well as post works figures.

You will have a guide for the GDV and rental potential once it is completed. This will give you some certainty over your project and whether it is viable.

If you are happy with the figures we can usually use the same valuer for the survey for the exit.

If you would like to have a chat about your project and how bridging could help then please give me a call or drop me a dm…

Common Mortgage Mistakes: How to avoid them?

I am often asked to ‘fix’ issues that have come about from clients not using the right mortgage, and it is sometimes pretty tricky to do. So I thought I’d run through some examples of things you shouldn’t do as a property investor…

Use a Residential Mortgage for an Investment Property

This sounds like an obvious one, but you would be surprised how much it comes up!

Yes, there are some tax advantages to buying your home over an investment property – but that doesn’t mean you should do it!!

Once you have lived in a property (or your credit file looks like you have) it can be difficult to obtain a BTL mortgage on it, particularly if it’s an HMO.

So please don’t do it!!

Use a Standard Mortgage when You Intend to Refurbish or Convert the Property

This is probably the most common mistake I see made by investors.

You’re going against the terms of your loan. The lender won’t like it and may not want to work with you again.

If you are looking to refinance and you haven’t let your property out then the new lender will see this on your bank statements and it could present a problem.

Not Speaking to your Broker before Instructing Solicitors

There are many types of solicitors, each with their own specialism – and bridging/development is very different from residential mortgages!

Using the wrong solicitor can stop your mortgage from completing, so it’s really important you get the right person for the job.

Some lenders will allow you to use the same solicitors to act for them and you, saving you time and money so check if you can do this before deciding who to use.

Not Exploring all the Options before you Commit

We have had a few cases recently where the client has paid for a valuation or received an offer before realizing that the product they are looking at doesn’t work.

This may be because the rate is too high, it doesn’t release enough inquiries or the terms just don’t seem right.

It’s important to know that you are working with a broker who does that type of business and ask for examples of previous cases.

It’s expensive to swap halfway through!!

so please speak to us (or a broker who does lots of what you are looking to do) before you start.

and if it sounds not quite right, then it probably is!!

Bridging vs Standard Mortgage