A new mortgage product aimed at investors looking to purchase or refinance properties in need of refurbishment has been launched.
The Refurbishment Mortgage offered by commercial and buy-to-let mortgage broker and packager Mortgages for Business, will provide a one-stop-shop deal for these investors. Loans will be based on up to 70% of the property value after refurbishment with a works retention at outset. Rates will be set at 5% above base with a 1% loading during the refurbishment phase.
In the past property investors have been restricted by lenders who refuse to take a view on a property’s refurbished value. Once investors have gained initial finance they then have to repeat the process once refurbishment is complete – often doubling the administration costs.
David Whittaker, managing director of Mortgages for Business, said: "The Refurbishment Mortgage has been designed to make the process of investing in property in need of some renovation easier and more cost effective.
"Investors are suffering the burden of going through the loan process based on initial purchase price and paying all the costs associated with it. They then have to go through this again once the refurbishment is complete – often with a different lender who uses a different panel of valuers and conveyancers. This product – which is exclusive to us – will streamline that process and bring the total cost of financing these properties down."
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