You are relying on the property being sold or refinanced if you are keeping it.
These are the most common items which cause delays in the refinance process:
– Not starting the process early enough. If you have used a broker to arrange the bridging finance and they are doing the exit keep them updated and provide an expected finish date.
I’d expect to start the refinance exercise approximately one month before this for our clients. It’s surprising how many are so focused on getting the property finished they forget it needs to be repaid.
– Delays in information required by lenders. If we ask for a document we need it. Proof of income by way of accounts and/or tax year calculations and tax year overviews need to be on file. If you don’t it’s surprising how many accountants are on holiday when you ask.
– Bank statements. Check before they are released to make sure there are no items which will concern lenders.
– Make sure your ID is in date and signed and you have a current proof of address that has been posted to you.
Quite often a lender will be able to electronically identify you but if they can’t they will need paperwork to prove who you are and where you live.
– If you have more than four mortgaged properties you are a portfolio landlord so keep a spreadsheet with details of your properties including rental income, balances and mortgage payments. Also check that they have a valid EPC of E or better.
Some lenders may require a business plan and cash flow forecast. If your accounts are up to date this shouldn’t be an issue and your broker should be able to assist you.
– Update the EPC if you think after works it is a C or better as you may get a lower interest rate on the BTL mortgage.
– Buildings Insurance. With most lenders it needs to cover the rebuilding cost in the valuation. A lot of lenders require their interest (their name) on the policy and I’ve seen this delay completion many a time.
-Solicitors. Most are the busiest they have ever been so get regular updates and find out what is outstanding and what you need to do. If you reply on the same day enquiries are raised your solicitor and return paperwork quickly they are more likely to treat the case urgently.
With the odd exception BTL lenders are taking much longer at the moment to assess mortgage applications so have everything ready to submit to the lender at least two weeks before completion of the property.
This way you can send the mortgage application to the lender and by the time they have assessed it and instructed the valuation the property will be finished.
It’s frustrating paying extra bridging interest because completion has been delayed due to a lack of a document which could have been on file weeks ago.
Don’t delay, repay.
If you need any help on arranging bridging finance and/or getting it repaid we’d be happy to help.