Most commercial lenders tend to just look at the bricks and mortar value of B&B’s, hotels etc. They also don’t consider projected income which can leave borrowers short when there is significant goodwill or they have a small deposit. We have a number of high street lenders prepared to take a view as follows:
Lending up to 70% of the bricks & mortar and goodwill valuation
Another lender will consider bursting the 70% valuation and go up to 85% if the accounts and case profile are very strong
Projected income can also be considered – for example; where the property being purchased has poor accounts, but the purchaser has a good track record and well reasoned projections.
At Promise we are seeing a lot of this type of business and, whilst some of it will fit the secondary lenders (due to credit profile etc), we are getting more success with high street lenders and far better rates. If you have a B&B or small hotel enquiry, purchase or refinance, please make Promise your first port of call. We are happy to do everything on the case and fully liaise with your client so you can do something else.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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