When it comes to financing a HMO conversion, the traditional lending market can offer limited options leaving bridging finance as an attractive alternative for many landlords. There are a number of reasons why a bridging loan can be suitable for HMO conversions including:
- Speed of funds – from enquiry to application bridging loans have a quick turnaround time. In some instances, bridging loans can take days, rather than weeks to complete; shortening the time before a landlord is able to start renting out their property as a HMO and receiving a return on their investment.
- Fees – typically lenders do not require any upfront fees for a bridging loan and will not charge a fee if the borrower chooses to repay the loan early.
- Flexible criteria – a bridging loan is traditionally secured against a property, meaning that lenders do not need to consider other traditional lending criteria such as credit scores and proof of income. For a landlord, this can be beneficial as the loan is secured against the property in question rather than their personal assets.
- Monthly repayments – unlike other types of finance, a bridging loan is not paid back via monthly installments. Instead, repayments are due at the end of the terms, meaning landlords can focus on the conversion itself while rental income isn’t being generated from their property.
- Exit route – lenders will want to know how the landlord is planning to exit the bridging facility when agreeing the finance. Exiting from a bridge to a buy-to-let mortgage is a common exit route for many landlords in this situation.
How can West One help?
- Offer both regulated and unregulated loans as either 1st or 2nd charges
- Loans secured against all property types (residential, semi-commercial, commercial) across England, Wales and mainland Scotland
- Max LTV up to 75%
- Loans up to 30m (higher can be considered upon referral)
- No early repayment charges
- Complex offshore structures considered
- Minimum term 1 month
For more information on our bridging product range please get in touch with our sales team:
T | +44 (0)333 123 4556
E | sales@westoneloans.co.uk
W | www.westoneloans.co.uk
In this article we have mentioned some of tax benefits associated to with limited companies, this information is generic and as each individual’s tax affairs are different, for tax advice, your clients may want to seek independent advice from a tax advisor such as an accountant.