I am interested in the concept of purchasing property at BMV with no deposit.

Regarding the article sentence:

"He asked the audience were they aware that you do not need to put down a deposit if you buy a property that has been valued at 15% below market value by RICS."

how easy is it to find a lender that will fund 100% of the purchase price, eventhough it is 85% LTV?

Hi Gloucester landlord,

re "how easy is it to find a lender that will fund 100% of the purchase price, even though it is 85% LTV?"

I did this a couple of times with Mortgage Express (MX). Let me explain how it works

* Mortgage:
- Lender lends you based Purchase Price (PP), regardless if you are buying BMV.
* ReMortage:
- Lender lends you based on the Market Value (MV).
- You have to already own a property to get a remortgage, i.e. you cannnot get a remortgage in order to purchase the property.

I got a property worth 295k (according to the valuation) where the vendor agreed to sell for 250K.

So I went to MX and asked for a remortage (despite the fact that I did not own a property). MX valued the property and gave me a offer.(where I could just draw the cash if I already owned the property)

With this offer in hand I went to a "closed bridging” company and asked them to lend me 250K for one day. (rate at 1%).

- My solicitor got the 250k in the morning from the closed bridge and exchanged and completed in the property. So I became the owner of the property
- in the afternoon of the same day I could already drawn the cash from the MX remortgage as I was the owner of the property. I got from MX 85% of the MV(295K), i.e. £250,750, so i just had to pay the fees to buy the property.

When speaking to a broker you need to ask for a same day remortgage If the broker is good he will understand what you mean.

Hope this helps.

Erico

Thanks Erico. That definitely helps!!! It has been bugging me for some time now as to how to go about financing such a purchase. MEX do appear to be one of the more flexible lenders.

Thanks again.

Hello guys,

MEX are one of the very few lenders who will lend on this basis. A lot of lenders require that you own the proeprty for a minimum of 3 to 6 months beofre you can re-mortgage.
One of the problems that you face with MEX is that their rent/interest calculation is often not that generous so you need a decent rent to make the figures stack up.

Peter

Thanks for the input. I think you're right, MEX want 125% rental coverage. They state in their mortgage conditions, along the lines of

"Buy to Let product`s are calculated on rental income and require a rental income of at least 125%, or 120% where the interest rate is fixed for five years or more.
Next-Day Remortgaging is acceptable on all product ranges (except Buy to Let Extended Criteria Products). Applications for Next-Day Remortgages on New-Build properties will be based on the lower of the purchase price less any discounts OR the valuation. Please note Mortgage Express define a New-Build property as "a recently constructed or converted property that, according to the sales transaction date has been sold for the first time as completed and ready for occupation within the last 6 months".

Will get my broker to have a sniff round other lenders.

Hi,

C&G also provides (85%LTV 125% rental coverage) same day remortgages

Regarding rental converage, I have been able to overcome this problem by having the lender consider the rental on a multi-let basis.

The house I mentioned above had a single rental pf 250 pw. However each room of the house, when let separatelly will go for a average of 115pw where 4 rooms are letable (i.e. one of the receptions is considered as a room). Hence rent coverage has not been the limitation factor in this deal.

Both MEX and C&G will agree to consider the rental on a multilet basis.

Erico

For more info on buying BMV google Glenn armstrong, I am going on his one day course this saturday.

Will up date next week if you are interested.

Jason

Thanks Jason, any extra info appreciated

Be interested to hear feedback on Glen Armstrong. I have met him and one or two of his associates but not taken things any further.

Peter

Another option to consider on property education (including BMV) is Ranjan Bhattacharya

I did his 1 year mentorship where I gained all my UK property knowhow.