10th Dec 2016
We are in the process of transacting a deal which needs to be completed in a couple of weeks. There were some issues concerning the title, timing and works done to the property.
The reason we got this deal is because we could close very quickly. The consequence of this is we now need to get the funding in place post exchange.
To date we have never performed in obtaining funding, we are pulling out all the stops to get this over the line. The time pressure has been built up partially by the clients, who compounded the problem through indecision, and not providing the relevant paper work in a timely manner.
This is probably the worst time to be taking it easy, as this is a time when valuers are on annual leave and the ones who are working are fully booked, many are focusing on their coming Christmas break rather than on entertaining new business.
It is with this backdrop we have been charged with the task of arranging finance for this deal. We have various arrangements with lending companies, in particular bridgers. This is whom you turn to when time is of the essence.
We have developed a good relationship with one particular bridger. Post Brexit when every finance company was worried about the loans they had out, due to the loan to values being breached, we worked with the lender to ensure we managed to firstly reduce their exposure and ultimately managed to repay the debt by moving on to an alternate lender in due course. This carries a lot of weight, it is when things don’t go quite to plan and you still manage to maintain a relationship.
It is to them we turned to when time was of the essence and views need to be taken on certain points. We were lucky to obtain a valuation within 48 hours of instruction, and now are proceeding with the legals. It is our aim to actually complete prior to the legal completion date, so that we are in a position to rent the property out. Once you hit the Christmas period it becomes very difficult to find a tenant.
The only reason we couldn’t go to a main stream lender on this deal was the lack of time.
However, there are lenders now who have adapted to the market’s need for speed and offer a seamless transaction between a bridging loan to a conventional mortgage. This means they will move at speed by bridging the deal, a bridging loan requires less information than a normal mortgage. Once this in place and the deal has been executed they can then transition to a conventional mortgage without the need of further valuation and further arrangement fees. This offers the best of both worlds to the investor, speed to close the transaction, and the comfort of having an exit to a conventional mortgage paying normal rates.