How to make sure your off-plan buy-lease property is mortgage friendly

While off-plan brochures can look incredibly attractive, offering high rental yields for buy-to-rent investors, it’s important to do your homework and make sure your off-plan buy-let property is ‘loan-friendly’. mortgage ” to save you. time and money when you are done.

The construction of a multi-storey building.  Two construction cranes on a building construction.  Scaffolding on several floors

While off-plan buying comes with some risk, it’s usually a good option if you’re buying in an area where house prices are rising and there is a need for more homes.

Panoramic view of Manchester city

While buying a buy-to-lease property may seem like a straightforward process, there is a lot to dig into once you’ve scratched the surface.

When buying an off-plan property for rent, doing your homework can really come in handy when it’s time to finish it.

By doing your homework ahead of time, you can make sure you’re giving yourself the maximum mortgage eligibility and saving a lot of time, money, and stress when you finish.

– Stuart Marshall

MANCHESTER, GREATER MANCHESTER, UK, April 27, 2021 /EINPresswire.com/ – Buying off-plan can seem both tempting and scary at the same time. While many off-plan brochures can look incredibly attractive, offering high rental returns for rental investors, it’s important to do your homework and make sure your off-plan buy-let property is’ mortgage friendly. ” to save money. you have time, money and stress when you finish.

What is “off-plan” purchasing?
Buying off plan is where you buy a property before it’s built. While this comes with risk, it’s generally a good option if you’re buying in an area where house prices are rising and there is a need for more homes.

“There are advantages to buying off-plan,” says Stuart Marshall of Liquid Expat Mortgages. “ For example, if you are buying in a desirable area, you can often find that your property has already risen in value by the time it is completed versus when you bought it. Many off-plan properties are also the subject of special offers that offer buyers the opportunity to obtain better plots that they might not be able to obtain in a normal buy-to-lease market.

Off-plan rental properties sometimes also allow the buyer to choose their fixtures and fittings, allowing you to better tailor your property to your “ ideal tenant. ”

Do your homework!
“While off-plan rental properties can look incredibly appealing, you also need to make sure you do your homework,” continues Stuart Marshall. “ It is very tempting – and incredibly easy – to sign the reservation form on an off-plan buy-let property and think that there is nothing else to worry about until it is completed in a few minutes. years. However, the more you are able to do your due diligence before booking, the better! By doing your homework ahead of time, you can make sure you’re giving yourself the maximum mortgage eligibility and saving a lot of time, money, and stress when you finish. By ensuring the mortgage eligibility of your property, you do the same for future buyers, thus guaranteeing the largest pool of potential buyers when you come to sell ”.

But how do you make sure that your off-plan rental property is as “ mortgage friendly ” as possible? Well, there are a number of things you can do before you even decide to take the plunge into an off-plan rental property. First of all, you need to think about the following things:

– What is the reputation of the developer and what are the customer satisfaction levels?
– Is it possible that I can get a developer agreement? For example, some developers will offer fixtures and fittings or cover the stamp duty on the property.
– Make sure the developer has insurance to guard against their failure to complete development. This could involve a real estate lawyer.

“One of the biggest concerns investors have when it comes to off-plan developments is the expiration of mortgage offers,” says Stuart Marshall. “Usually mortgage offers expire after six months. When buying off plan, you can reserve a property a year or more before it’s available so you can be left dry if you’ve paid a reservation fee but can’t get a loan. mortgage. Fortunately, some lenders are now offering longer periods on their transactions. But, it is important to speak to a specialist broker about your situation so that they can advise you appropriately and ensure that you are not left behind.

Once you’ve done your initial homework, you need to take the important step of getting a “decision in principle” to see how much a lender will lend you. With this process, it is important that you check the following:
– Will the lender lend on new construction sites? Sometimes lenders don’t lend on new apartments.
– You need to make sure that you are not over your lender’s exposure limit since lenders will have a maximum percentage of properties they are willing to lend against on a given development.
– The lender’s surveyor will verify plans, construction materials and construction method. If there are any issues here, the lender probably won’t offer you a mortgage. Coating issues are of particular concern at this time. However, an expert broker will be able to help you through the process and ensure that there are minimal issues with your property by the time your lender’s surveyor inspects it.
– Since you are buying an investment property, you will also be subject to checks on the realizable rent of the property. These verifications will be carried out by the lender’s surveyor and you will need to provide your projection of the rent, supported by the written opinion of an agent. If the surveyor does not agree with your projection, you may be offered a smaller loan and therefore have to put a larger amount on your funds. This is a very important consideration as you need to know that you can afford the supplement if needed.

So while buying a buy-to-lease property may seem like a straightforward process, there is a lot to dig into once you’ve scratched the surface. As always, hiring an expert broker will ensure the process is as smooth and efficient as possible, helping you fully discuss your options and sort out any issues early in the process.

Disclaimer: Please note that Liquid Expat Mortgages has no direct control over the timeliness of processing mortgage applications or mortgage offers issued by lenders. Liquid Expat Mortgages has no control over the legal process and CANNOT accept any liability if your request is not processed before the expiration of the current land stamp duty rules expiring on September 30, 2021 or any extension of that date.

Liquid mortgage loans for expatriates
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Telephone: +44 (0) 161 871 1216
www.liquidexpatmortgages.com

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