What is Auction Finance?

Auction Finance is a form of bridging finance which is used for buying property at auction. It allows the buyer to access funds quickly to complete the transaction, (typically within 14 or 28 days, in line with the Auction House’s requirements). Auction purchases generally have to be completed within 28 days of the auction so in most cases, this is too short a time frame to arrange a conventional mortgage. This is particularly the case when the property is uninhabitable or needs major renovation. The Auction House will usually ask you to pay 10% of the purchase price on the day of the auction, plus the auction fees, if your bid is successful. You will then have a further 28 days to complete the purchase. When you know you will be intending to bid on an auction property, we can arrange peace of mind by pre-qualifying you with a lender, prior to auction taking place. This will provide some assurance that funding will be available to allow the purchase to complete. Many of the lenders on our panel do NOT require valuations for auction purchases and will work from actual purchase price achieved.

What is Auction Finance used for?

Auction finance is used for auction purchases. This type of loan is designed to be fast and to enable you complete your purchase very quickly. It is important that Auction Finance is used correctly, as it can be an excellent way to profit from properties with potential, which are not being sold on the open market via the more conventional Estate Agent channels. Here is how to make the best use of Auction Finance: Research and Plan The first stage is to identify what type of property you are going to buy. You will need to look at the online auction catalogue and chose a target property or properties. Consider how much work needs doing to the property. Is it in a good area? What are the selling prices and values of comparable properties in and around the area? Is the property good value, and can it generate a profit? Provisional Acceptance The next step is pre-approval. This is an initial approval process which might include credit checks, identification checks and a quick on-line assessment of the property. The aim of this is to give you the confidence that finance is available, and what amount of finance is available, in principle (usually as a percentage of the purchase price). Win the Auction Once you are all set and you have your pre-approval in place, you can go to the auction and start bidding. If successful, you will need to pay 10% of the purchase price there and then, possibly plus auction fees. You will then be given up to 28 days to complete the purchase through your solicitor. You will also be responsible for insuring the property straight away.

What are the Key Features of Auction Finance?

Fast loans! Designed to complete within the Auction House’s time frame. Loans from £25,000 with no maximum loan amount. Auction Finance Rates generally start from around4% per month No Exit Fees on most loans but this is subject to the Auction Finance lenders specific criteria. No Valuations. In many cases a property valuation report will not be required. Free legals. Some lenders offer free legal fees for setting up the loa Bear in mind though that you will still have to pay your own solicitor. 100% Auction Finance Available – 100% LTV available with other/ additional security. Loan terms from 1 month to 2 years For any property type in England, Scotland & Wales.

What information do you need to progress an Auction Finance loan?

Buyers name, address & date of birth. If the buyer is a company, the directors names and addresses are also required as well as the company name and its registered number Address of the property to be purchased. A copy of the auction Sales Particulars. Narrative summary of your plans/ intentions for the property. Explanation of how the Auction Finance will be repaid (usually via a sale or refinance). Different Auction Finance Lenders have different criteria so other information may also be requested.

What is Bridging Finance?

A bridging loan, as the name suggests, is a short term loan (1 month to 2 years terms) which can be used to ‘bridge the gap’ where you want to buy a new home but have not yet been able to sell your existing home. Bridging loans can also be used for buying a property at auction, where you will have to pay for the property within 28 days but can’t raise a normal mortgage within that time. If the property you purchase needs renovation, a bridging loan can cover this and allow you to remortgage the property on normal terms once the renovation is complete.

What is bridging finance used for?

Bridging Finance can be used for Cash flow easing and capital raising Development project finance Purchase of main residence Refurbish or extend property Circumventing a broken property chain Debt consolidation Purchase of BTL (Buy to let) property Any other investment opportunities

What are the different types of bridging loans?

There are two basic types of bridging loans, each of which is designed to satisfy certain criteria. These are shown below: Closed bridge: with this type of loan, the borrower will be given a set date when the loan will have to be repaid. For example, the borrower is looking to purchase a new property and has already exchanged to sell their existing property with the completion date fixed. The sale of that property will become the vehicle to repay the bridging loan. Open bridge: The borrower sets out a proposed exit plan to repay the bridging loan but there is no fixed date set at the outset. There will of course be a clear cut-off point where the bridging loan has to be repaid but the borrower has flexibility to do that within the overall repayment term set for the loan.

What is the process for arranging Bridging Finance?

Lender is provided with summary of the reasons for wanting a bridging loan and given a statement of the security that will be available to secure the loan and the strategy to be used to clear the bridge by end of term. Lender receives evidence (if applicable) of the new property purchase and proof of the price to be paid Lender will issue an offer letter which will state the terms and conditions applicable to the proposed loan. Lender will generally instruct a valuer to provide a valuation report on the property and sends the offer documents to your solicitor. Your solicitor will check the terms of the loan and advise you on how to proceed. If everything is acceptable to you, you sign the papers for the loan. Once that is done, the lender will release the funds to your solicitor who will arrange legal completion.

What is the buy to let finance?

Buy-to-let finance is a mortgage specifically sold to people who buy property as an investment, instead of a place to to live. If you are planning to rent out a new property, many lenders will prefer you not to finance your purchase with a standard residential mortgage.

What salary do you need for buy-to-let?

Lenders will typically need the rental income to be at least 125% of the monthly mortgage payments (on an interest only basis), or even up to 145%, depending on a lender’s criteria. Most lenders will also require you to be earning an income yourself. Try the Buy to Let calculator to see how much you could borrow.

Is buy-to-let based on your income?

Buy-to-let mortgages are designed to help you buy a property that you intend to rent out to other people, rather than to live in. The amount you can borrow usually depends on the rental income you expect to earn from tenants, although we might consider other income in some circumstances.

Can I remortgage a buy to let without a job?

You may be able to get a buy-to-let mortgage with no income although you might find that the range of lenders or deals are limited. If you don’t have a job, property ownership alone is not enough to fit with most lenders.

How many buy to lets can you have?

The very short answer is, that there is no limit. We have some clients with extremely large property portfolios, who have literally hundreds of buy to let mortgages

Can I have 2 mortgages at once?

Buyers who have enough income can carry two mortgage payments at once if they still meet the debt-to-income ratios required by their lenders. So you might be able to qualify for two mortgages at once, if your credit score and job status are also strong.

Can I rent out my house without telling my mortgage lender?

Can I Rent Out My House Without Telling My Mortgage Lender? Yes, you can. But you’ll probably be violating the terms of your loan agreement, which could lead to penalties and immediate repayment of the entire loan. So before you decide to rent out your property, you must inform the lender first.

What is Cash Flow Finance?

Cash flow financing is a form of secured lending where the loan is made against the expected cash flow through the business over the next few months, but usually not more than 6 months. As the lenders security mainly lies in the accuracy of the cash flow projection, the lender will study the business projections and will only advance the loan if it is fully satisfied with the plan. As additional security, the lender is likely to require personal guarantees from the business owners or directors that the loan will be repaid.

Why is cash flow important?

Cash flow is the inflow and outflow of money through a business and provides the business with the funds to pay its bills, pay its employees, invest in equipment, stock or expansion. Positive cash flow is vital to any business and determines the profitability of the business and secures its future. Negative cash flow, if allowed to continue for extended periods, will destroy a business.

When would you use cash flow finance?

Businesses usually turn to cash flow finance when they experience a sudden drop in their bank balance which threatens the survival of an otherwise profitable company. Some situations that can bring this about are: – A major client has informed you that it will withhold payment to you until a certain event has been cleared. – The business is experiencing a temporary slow down due to reasons not associated with any downturn in its market. – An opportunity has arisen that will enable the business to grow but to take advantage, the business will need a short term injection of cash.

What are the costs of cash flow finance?

Due to the short repayment terms associated with these loans and the higher levels of risk undertaken by cash flow lenders, it is inevitable that the fees and interest rate charges will be significantly higher than you would expect from traditional long-term bank loans. For this reason it is vital that you carefully examine the terms of any loan offered to you and build these costs into your businesses cash flow projections over the term of the loan to be absolutely sure that what you plan is fully workable. As there are a lot of products on the market with many lenders offering them, always double check that you fully understand all of the fees, interest rates and the terms and conditions that are being offered.

What is Development Exit Finance?

Development Exit Finance is a short-term loan, used to repay outstanding finance against a property development once the project has reached practical completion.

What are the Key Features of Development Exit Finance?

Loans from £100,000 with no maximum loan. Rates from around 0.49%. Terms available for up to 36 Months. Acceptance can often be arranged within 14 days Adverse credit accepted.

When is Development Exit Finance required?

Property developers, large and small, use development exit finance to maximise the profits that they can draw from a newly completed property development. This can let them obtain the start up capital for their next project while awaiting a suitable buyer for their completed project. They also use it to withdraw from a project that’s going to prove unprofitable and where development exit finance will allow them to repay their existing finance resulting in a lower value loan that only reflects the capital spent, coupled to a repayment term that will give them time to sell on the unfinished project without seriously damaging their cash flow position.

When can a normal mortgage be used as exit finance?

Where the development is a private one off project, such as a self build home, that will be used by the developer for their own residential use or, where they have developed the property for the rental market with themselves as the landlord. In these cases, the original development finance will generally be for reasonably smallish amounts, allowing the property to be financed long term through normal mortgage channels. This will allow some of the equity in the completed property to be released to repay the original development loan and/or provide any additional money required by the owner.

What is Development Finance?

Development finance is a short-term loan that provides the funds to pay for the building, upgrading and refurbishment costs associated with property development projects. These loans will have repayment terms geared to the projected build time of the project, usually for between 6-18 months but can be longer. Depending on the type of project, the loan funding may be issued in stages that suit the build plan. This keeps the repayment costs to a minimum.

How do you get Development Finance?

There are a wide range of lenders who offer development finance, ranging from the high street banks through to specialist lenders whose names are not so well known. In the same way as you would apply for a normal residential mortgage, you could approach one of the high street banks and apply for a loan. However, as with mortgages, this would limit your choice of finance to that lenders own products with the likely result that the deal that you obtain would not be best for your project. Obtaining the best deals available on the market will usually mean contacting a broker who specialises in these loans and who will have sound knowledge of a wide range of lenders products and their lending criteria. This will save you time and ensure that you get the best deals that are available to suit your project. Our brokers are highly experienced in these types of loans and once you complete the simple enquiry form, will quickly be in touch to guide you on the best way forward.

What are the Key Features of Development Finance?

Rates from 5.15% per annum 100% of build cost available Available up to 70% of the Gross Development Value 100% Joint Venture Funding Interest only charged on funds drawn Open to individuals and corporate structures Exit facilities available Specialist Relationship support with your own dedicated specialist advisor

How is development finance used?

With new build projects, development finance can often be obtained to finance both the land purchase and the actual build costs. Lenders will usually lend up to 70% of the cost of the land plus up to 100% of the cost of the actual build providing that the combined loans do not exceed 70% of the gross development value. On completion of the project, the borrower would normally re-mortgage the property through a competitively priced normal mortgage lender and use the funds to pay back the original development loan. Where the project is for renovation purposes the loans will follow similar LTV criteria.

What are the benefits of development finance over mortgages?

Completion is often within 14 days (Standard high street bank lending can take up to 3 months or longer). Less underwriting than with standard mortgage lending. Much better chance of being accepted than would be the case with a mortgage. Less paperwork involved than with standard mortgages. Only pay interest over the time you hold the loan (If the loan term was 18 months but you pay back in say 6 months, you only pay interest on those 6 months).

What is refurbishment loan?

Refurbishment loans are available to property investors, landlords and developers looking to upgrade a tired residential or mixed use property before renting it out. Refurbishments are much smaller projects than property developments.

What can use the refurbishment loan for?

Refurbishment loans have many useful applications some of which are shown below: Enhancing planning by adding additional units or modifying the existing planning permission Light and heavy refurbishment projects to add value to the property or to improve habitation. Converting a property for a different use such as converting a church to a house or a shop to a flat. Extending a home or completing a loft conversion. Permitted Development Rights schemes. converting a residential property to HMO and vice versa. Upgrading a propert purchased at auction.

Can I get a loan for refurbishment?

Refurbishment finance usually starts at 75% of the property value post-refurbishment. Getting finance for anything higher than 75% can be difficult. Rates will usually start from around 5% but are higher for heavy refurbishments requirements. They’re usually short-term loans and are similar to bridging loans.

How does a refurbishment loan work?

A refurbishment loan is a type of bridging loan – a short-term solution for borrowing potentially large sums of money. Given the short-term nature of the loan, it’s understood that you will repay it with the proceeds of the sale of the property. You are likely to receive the funds from a refurbishment loan in two instalments.

What does it mean to refurbishment a property?

Property refurbishment is the chance to change and improve a property that you already own or a property that you are thinking of purchasing. This can be extending the property to a larger footprint, changing the purpose of the building, or refreshing an outdated look.

Second Charge Mortgage & Secured Lending Solutions UK

Why Choose Us?

High street lenders tend not to have the underwriting expertise to offer mortgages to clients who have complex financial affairs or requirements, so finding the right one for your circumstances can be a daunting task. We have access to specialist independent secured finance brokers that have strong relationships with the all UK private banks and specialist lenders not available on the high-street and experience of meeting any specific financial requirements. We can arrange bespoke mortgages & secured lending facilities and provide you with a tailored one-to-one advisory service.

We have access the following types secured lending finance deals and packages in the UK. Make a free no-obligation enquiry and we promise you won’t be disappointed.

Auction Finance

Buying property at an auction? When short-term finance is required, we act fast. We know the unique time constraints that can arise when buying a property, land, or purchasing an auction property where payment must be made within 28 days. Our process is mainly seamless throughout with our focus being on specialist advice, flexibility and...

Bridging Finance

Looking for a bridging loan? When short-term finance is required, we act fast. We know the unique time constraints when buying a property, land, or securing an auction property. Our process is seamless throughout with a focus on specialist advice, flexibility and complete transparency. Each facility being tailored to you with a focus on providing...

Buy to Let

Looking to finance a Buy-to-let Property? We work experienced brokers who have direct relationships with a wide range of lenders from traditional high street lenders to the more specialist lenders. This means we’ll find you a solution for simple transactions to more complex and unorthodox structures. Each facility is tailored to you to provide a...

Cash Flow Finance

Need help with cash flow financing? Whether you’re looking to grow your business , be experiencing a short term cash flow shortfall or need to invest in plant or stock, we can help you find a suitable funding solution. Through our broker access to the lending market, we can work with you to quickly find...

Development Exit Finance

Has your project just completed? If your development project is completed and you’re reaching the end of the term on your existing finance, or are on a high rate, we can help you to replace your existing funding with an affordable short-term solution. For more information see below. Find Financial Advisors Near You! Frequently Asked...

Development Finance

Looking for development finance? Whether you’re an experienced property developer or someone thinking about taking on your first property development project, obtaining the right finance to fund the project could be critical to its success. For many years now, our brokers have been helping people from every skill and experience level, to obtain development finance...

Other Uses of Secured Loans

Situations where a secured loan may work We have listed below some examples of situations where taking out a secured loan may work for you. We have avoided showing actual case studies as these can only show the situation against that particular set of circumstances. What we have done here is to look at areas...

Refurbishment Finance

Are you looking to refurbish a property? Refurbishment loans are a type of secured borrowing which are available for developers and landlords who are looking to improve a property before selling or renting it out. With our partnerships with experienced brokers we can access lenders who can fund 75% NET towards the purchase price and...

Secured Loan

How Secured Loans Work? If you an owner of an asset, such as a car or house, you may be able to borrow money as a secured loans. If you need a large loan over 5 years or more or are having trouble getting for a personal loan, a secured loan is a common option...

Our Services

Secured Lending & Finance Deals

Why Choose Us?

Auction Finance

Bridging Finance

Buy to Let

Cash Flow Finance

Development Exit Finance

Development Finance

Other Uses of Secured Loans

Refurbishment Finance

Secured Loan