Buy to Let Refinancing
Every property developer will know that there can be an occasion that they may wish to retain some, or all, of the properties they have created through buy to let refinancing.
With an uncertain property market, selling periods may be longer than expected and so buy to let refinancing may also offer a means to refinance an existing development facility.
In either scenario, there are specialist lenders whom will consider buy to let refinancing loans on a completed development project.
Such property development finance lenders may offer:
- From 50% LTV to 85% LTV
- Loans from £200,000 up to £25m and beyond
- HMO’s and PBSA considered
- Fast decisions
- Serviced or partially retained loans possible
- An adverse credit status may be considered
Buy to let Refinancing – How much can I raise?
The loan to value for your refinancing will vary from lender to lender and, of course, the lower your LTV then the better the annual interest rate will be. The buy to let refinancing will also depend upon the rental coverage, in other words, the amount of potential annual rent vs the annual interest payments. Lenders will want to know that all of their interest payments will be covered and, in some cases, an overage of 120% may be required.
With an uncertain property market, selling periods may be longer than expected and so refinancing may also offer a means to refinance an existing development facility.
Do I have to Provide Personal Guarantees for buy to let refinancing?
Yes, you will be expected to provide personal guarantees even though your loan will be in the name of an SPV. Personal guarantees will extent to all beneficiaries of the company although they may not necessarily be to 100% of the loan.
Consequently, buy to let refinancing can offer a developer an opportunity to hang on to some special units they may have created and where it is obvious of a good long term investment. Building an investment portfolio of such buy to let properties can be an interesting additional ‘string to their bow’.
Importantly, buy to let refinancing will be an alternative to potentially expensive default payment terms where a development facility has over run.