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1. What is Closed
Bridging Finance?
Closed bridging is where
there is a fixed exit strategy in place with a firm offer.
This is usually in the shape of a mortgage offer.
The closed bridging solution
allows 100% + funding for a property This means unlimited
discounted properties purchases can be funded as no money
down required deals, in other words no financial input from
the borrower. This system is often used by Property
Investors who operate in the BMV market.
2. What is BMV?
BMV stands for
"Below Market Value". A BMV property deal is where a seller
is motivated to sell for a quick completion. This is often
where a seller is motivated to sell quickly and is prepared
to sell below the open market value of the property.The
reason why people sell below market value usually from the
following:
- Emigration
-
Chain Breakers who do not want their dream property slipping
away
- A property
not achieving viewings or selling in its current condition
- Debt
problems including repossession prevention
- Probate
3. Is it really possible to achieve No Money Down deals and
even Cash back deals using the Closed Bridging System?
Yes,
What better way to make money in property than by doing for no
Money Down, also if you purchase at are around 18% less than the
market value of the property, you should end up with some cash
back in your hand as well!
4.
How does Closed Bridging Work?
You need to
find a deal, For example
Market Value (MV) £100.000
You buy at £80,000 i.e. say 20% below market value (BMV)
You apply through a mortgage broker for re-mortgage of 85% of MV
£100,000 = £85,000
We provide bridging finance of £80,000 to purchase the property
The solicitor having bought the property for you with our funds
then uses the mortgage funds of £85,000 instead of our funds of
f £80,000 which leaves £5,000 balance to pay the costs etc and
return the balance to you
5.
What can I use the Closed Bridging
Loan for?
You can use the loan to fund the purchase of an
investment property which will be re-mortgaged within 24 hours.
We will lend on most types of residential property purchased for
Investment purposes. We do not lend on residential property you
plan to use as your main residence.
6. Can I borrow 100% of the purchase price?
Yes, you can borrow 100% of the purchase price
and in some cases even more to cover fees such as stamp duty and
other costs providing that the property is being purchased at
least 85% below market value and is being re-mortgaged within 24
hours of bridging funds being made available.
7. What is the minimum and maximum loan?
Minimum loan is £26,000 and maximum £600,000
8.
How long can I borrow the money for?
We lend bridging finance typically for between
24-48 hours.
9.
Would you consider other "private lending"?
ClosedBridging.com has a number of Fund Investors who can
provide funding for various purposes including entering into
joint venture agreements. The fund investors will look
at each case on an individual basis. Example of
previous private lending deals has been deposit bridging
through to taking an equitable charge on a property. Please
email your personal requirements to
info@closedbridging.com
10.
What do I need to do to get our deal to stack up?
Its all to do with
what percent Below Market Value you obtain and what is necessary
for a No Money Down Closed Bridge deal. We generally state that
you need around 18%. If below about 18% you may need to
contribute a thousand or so. These are still good deals and you
obviously need to consider each case individually and whether
the capital appreciation will be worth while. Often it will be
recouped in this way within a month or two which is a good
return on the money.
If above 18% then you can expect a cash back. This being so then
why not save it to use as above to help when a thousand or two
may be required to do the deal?
Our suggestion is not to view each deal in isolation as a one
off but to have a balanced outlook about the below and above 18%
deals and let them average out. In this way you will grow your
portfolio quicker
11. What does it cost?
Closed
Bridging costs:
Our Mortgage Broker - No fee
Lender's Valuer probably £350 to £500 depending on the value
of the property being valued.
Our Solicitors for purchase and re-mortgage total: £395*+VAT+
Disbursements + searches, etc
The above are associated costs of the
mortgage and these would be payable on any mortgage application.
these are not cost charged by ClosedBridging.com or as a result
of the bridging finance. The only cost of ClosedBridging system
is 0.75% and £195 admin fee which is payable on completion.
There is nothing for you to pay upfront
*
Note that this is inclusive of Bridging AND Re-mortgaging. Most
solicitors charge TWICE and have higher fees to start with to.
12. How long does it take?
The answer is that we will move as fast as is necessary. However
quickly a solicitor is able to move the time depends on the
vendor's solicitor as to whether he is a speed merchant or a
snail, time taken is usually about four weeks if no problems
and vendor’s solicitor is co-operative.
ClosedBridging.com can suggest a solicitor for you to recommend
to the vendor to use who is co-operative with our solicitor thus
expediting the transaction.
13. Can I use my own solicitors/brokers?
Yes you can
although we would recommend that you check that they are
experienced in handling closed bridging/re-mortgage business.
Our experience is that a solicitor who is not used to these
transactions can unwittingly cause untold delays. We would also
point out that many solicitors charge TWICE for closed bridging
– once for each transaction. Our panel of solicitors charge one
fee.
14. What are the benefits of using your solicitors/brokers?
The whole process will be handled by our team who are
experienced in dealing with these type of transactions.
15.
Can you take me through each step of the process please?
Briefly - if using our broker and solicitor:
When you fill in the online application with the info about your
deal:
Our broker ‘phones you to discuss it and gets you an AIP (an
offer in principle).
you accept and then a firm offer is received in about 7-10
working days.
The Broker informs the solicitor who then contacts you for any
further information which may be required.
when the solicitor is ready to exchange and complete and your
mortgage funds are in his account he requests our funds for
bridging.
The solicitor uses our funds to purchase and switches the
purchase to the mortgage funds.
from the surplus of the mortgage funds he then returns our funds
and fee and settles other items.
The time taken is usually about four weeks if no problems and
vendor’s solicitor is co-operative.
The time taken can be reduced to a few days in urgent
circumstances such as repossessions by Our solicitor insuring
the searches and using a suggested solicitor for vendor.
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