Property Investors can remortgage and refinance within 6 months

When talking to property investors who are just setting out on their journey, I find so many say that they have heard a ‘rule’ stating an investor cannot remortgage within 6 months. This is a big industry myth. Although many main stream BTL (Buy to Let) lenders such as TMW and BMS have a policy not to allow a remortgage within 6 months of purchase; and indeed, a guideline was produced by the CML (Council of Mortgage Lenders) to that effect, the purpose of this guideline was not to stop property investors who genuinely add value and refurbish a property from being able to refinance and release capital that has been tied up in the purchase and refurbishment, so that the investor can move on to purchase the next property.

Lenders such as Mortgage Trust and Axis will allow an investor who has improved the property to remortgage against the open market value in 6 months. These are not the only ones, but at time of publishing, I would consider them to be the most proactive in this field. For investors who have HMO properties, the lenders who are most proactive in this arena of the market change to Shawbrook for larger HMO’s and Cambridge & Counties Bank who are happy to look at any viable project from a standard BTL to a large scale HMO conversion.

For this reason, I have been travelling the UK, attending most of the excellent pin meetings (property investor network) and reviewing with the audience some key case studies where we have purchased, refurbished and refinanced both standard BTL and HMO properties in as little as 9 weeks from purchase. This short video was taken at Dunston Hall in Norwich prior to the Norwich pin meeting. There are currently 50 pin meetings throughout the UK, they offer property investors fantastic educations from industry gurus as well as the opportunity to meet new contacts, rubbing should with like minded people.

During the presentation I speak of the key drivers to refinance quickly. And contrary to many old school investors strategy and opinions, it is NOT to buy BMV (below market value). There are risks associated with pure BMV transactions and lenders are not keen on such transactions to say the least. Preying on a distressed seller is not good business and Harvey Bowes, as investors and brokers, don’t promote that practice. We believe in win/win. We believe in fair market value for the purchase. Of course, fair market value could be a ‘keen’ and purchase price, so long as the investor has not taken advantage of the vendor.

The secret to successfully refinancing a property with 6 months of purchase is to add value. And the opportunities to add value for the right project can be very exciting indeed. Take for example a block of flats, perhaps one could split the title which adds value. And refurbish it, adding further value. Then perhaps there is the opportunity to re-plan the use of space and create additional bedrooms to the flats. That adds more value. Done correctly, such a project creates genuine opportunity for the investor and good security for the lender.

Another key element to refinancing a property recently purchased, particularly if it is a remortgage within 6 months, is to make sure your solicitor updates land registry as soon as you purchase. So many solicitors, particularly the cheaper ‘conveyance factories’ seem to leave it an age to send off the information and update land registry. If you undertake a quick refurbishment and place a remortgage with a lender for the post refurb property, yet you do not show as owner on land registry, it can cause delays and further unnecessary questions that would not be raised if the solicitor was on the ball.

To find out more about Harvey Bowes, or to talk to an advisor about remortgaging within 6 months, contact one of the team on 029 2175 4150 today. You can also go to our main website at http://www.harveybowes.com

If you want to attend a local pin meeting, you can find the nearest pin at http://www.pinmeeting.co.uk – don’t forget to use “BOWES” as a voucher code when you book on. That will allow you access to the meeting as a guest of Harvey Bowes and Pin, which will waiver the £20 entrance fee for the first meeting you attend. You can also bring a friend and use that code for them as well.

YOUR PROPERTY MAYBE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

 

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About harveybowes
Mortgage Broker and founding Director of Harvey Bowes Limited. A mortgage broking practice with bases in Cardiff & Poole, UK. We take a fresh and positive approach to mortgage broking which pays dividends for both our clients and frankly, ourselves. The team at Harvey Bowes are expert advisors in all aspects of mortgages from residential to commercial and buy to let.

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