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Did you know properties without a bathroom/kitchen are still mortgageable?

Properties without a bathroom/kitchen are still mortgageable?

Do you have clients who have run out of cash when doing a major refurbishment? They may have even moved out for a number of months.
We are getting a lot of these – They have often completed the major structural work but need further money to fit the bathroom and kitchen prior to moving back in.

Strictly speaking these types of properties are likely to be un-mortgageable in the conventional sense and many brokers take borrowers down the route of a bridging loan and then refinancing when the work has completed.

However there are far cheaper options available via traditional second charge lending.

Firstly, if clients can fit a temporary kitchen or bathroom this may overcome the problem – it shouldn’t need to be much more than cooking, washing and toilet facilities – a sink, water and a microwave may suffice for a kitchen. It’s important that we know about this at the outset so the valuer and lender are all on the correct page from the outset.
Bear in mind a temporary kitchen or any significant refurbishment will significantly affect the value as the property can’ be sold easily to a person needing a mortgage – the market is likely to be restricted to developers / cash buyers so be realistic about the valuation.

Secondly, if fitting a temporary kitchen or bathroom is not an option, whilst unsuitable security for a mortgage, some second charge lenders will still consider the property on a case by case basis from rates as low as 3.73%:

  1.  It must be obvious that the borrowers intend to move in following the completion of work within approximately 2 or 3 months
  2.  The property must be secure and weather tight and approaching the end of the refurbishment – the end is in sight.
  3.  We need to be on lower LTV plans – if we need 80% to 85% LTV lenders will be more nervous
  4.  If borrowers are paying rent or have other costs to live in a temporary property, these costs may need to be considered in the affordability assessment – ask for this information at the outset.
  5.  When instructing the valuer we need to let him know what he is walking into. We are looking for a valuation of the property plus an estimate of the valuation once the work is complete. The borrowers should be prepared to show copies of plans or estimate to complete the kitchen / bathroom.

The rest of the case will need to fit the particular lenders profile but we plenty of choice from prime adverse lenders.

Of course, we also have refurbishment bridging products but please let us have a crack at a far cheaper term loan option first.
The rates are lower, it will save your clients paying two lots of broker’s fees, lender fees and valuation plus they don’t have to worry about the uncertainty of refinancing a short term bridge.

We aim to try harder to find the best deal for your client and explore alternative options too.
We also avoid wasting your time, or your clients, with false promises. Just hard work to do our best.

Please give me or a member of the underwriting team a call with you next second charge enquiry on 01902 585052

www.promisemoney.co.uk

01902 585052


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    More than 50% of borrowers receive offers better than our representative examples. The %APR rate you will be offered is dependent on your personal circumstances.
    Mortgages and Remortgages secured on land
    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
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    Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

    More than 50% of borrowers receive offers better than our representative examples

    The %APR rate you will be offered is dependent on your personal circumstances.

    Mortgages and Remortgages

    Representative example

    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

    Secured / Second Charge Loans

    Representative example

    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

    Unsecured Loans

    Representative example

    Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


    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.


    Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
    Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

    Authorised and regulated by the Financial Conduct Authority – Number 681423
    The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

    Website www.promisemoney.co.uk