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How we make bridging finance effortless for our clients

For a client using bridging finance, certainty and fast access to funds are always at the forefront of their expectations. This is because, by its very nature, bridging finance should be fast and flexible compared to traditional funding methods, such as mortgages.

At mtf, we have not lost sight of this at a time when other lenders are moving on to computer banking models and lengthy application processes.

It is important to us that our brokers, introducers, and clients know they are dealing with people and not a corporation. Therefore, we go to great lengths to ensure that we deliver an open, communicative, and transparent service, and take the time to listen and fully consider each application. From start to finish there is direct dialogue with a decision maker who has the ability to make executive, pragmatic decisions and to drive a case home to completion.

We have built our underwriting process around a simple idea; the value of a property and the rationale of a loan are the most relevant criteria when assessing any bridging finance application.

As speed is such a vital element of bridging finance it’s important that all parties involved move swiftly because if they cannot complete to the borrower’s schedule, the client could miss out on an opportunity. Therefore, mtf has its own legal underwriting team who is responsible for driving the legal process. We feel by having a dedicated team, working in tandem with external lawyers, mtf significantly reduces any chance of delay or misunderstanding.

mtf is committed to building strong relationships. We have never over promised or under delivered because we don’t want to let our brokers or clients down. We always make sure we are continuously working hard to meet requirements.

In a recent example, a client wanted to purchase an investment property and required funds within a fortnight. The client was in Jamaica at the time and due to other commitments, was unable to come back to the UK in time to verify their identification documents. Time was fast running out for the client as he was about to lose an investment purchase.

So, we decided that I would fly out to Jamaica to meet the client, verify his ID, and witness the signing of the legal documents. I immediately flew back with all the signed documents allowing us to proceed with the loan. The client was then able to purchase the investment property with the funds from mtf with days to spare.

It’s important to note that this was for a £150,000 loan, not that of a million pounds plus, demonstrating how mtf will go the extra mile for the client, regardless of the loan amount requested.

Most lenders promise a great and fast service. At mtf, we understand that a promise is only good when it is delivered. We have built the company’s reputation around a strong service proposition, by being open and communicative and running an efficient operation. We are grateful to have received multiple industry awards in recognition of our approach to lending and the exceptional service we consistently deliver.

Enquire for bridging finance today.

Funding business expansion in just 12 days

There have been a number of challenges for business in 2018. From economic pressures and ongoing Brexit negotiations to rising interest rates- all of which are set to create further challenges for the SME community in one way or another.

Access to finance, however, continues to be a critical challenge for UK small businesses. There is an ongoing lack of flexibility and for companies trying to react quickly to the new challenges in the market, that makes it hard for them to seize new opportunities.

Small business owners need a wider, more versatile pool of liquidity to draw from that is tailored to meet their needs. One major source of capital available and willing to fund the SME space is bridging finance.

Case in point

As an example, mtf recently completed a bridging loan for clients who were looking to raise funds to invest in their growing retail business.

On the strength of the cash flow from their first retail premises, the clients had been able to obtain a commercial mortgage for a second location. However, an opportunity had suddenly come up to purchase the premises next door. To achieve faster growth, the clients wanted to purchase both premises- expanding their storefront, as well as purchase stock for the new, larger store.

The sellers had a specific completion date which meant the clients needed to move quickly to take advantage of the opportunity and were unable to obtain a commercial mortgage in the time-frame required.

Faced with roughly a fortnight to complete the purchase, the clients needed to act quickly. As time was of the essence, they were immediately introduced to us by one of our long-standing brokers.

On receipt of the enquiry, mtf was able to give an immediate decision, and we issued the offer of loan that day. The clients needed 100% of purchase price, so released equity in their principal residence by way of a second charge to increase funding.

Given that the commercial property and the residential property now needed to be valued, it was imperative that the valuation was undertaken as soon as possible. Therefore, we instructed the valuation at the same time as going to offer. Our team then worked around the clock to ensure all the legal requirements were addressed to ensure everything was ready to be sent to our lawyers as soon the valuation report came in.

In just 12 days, mtf provided a £450,000 bridging loan spread over both assets at 65% LTV, based on the open market value of both assets. Interest was retained at 0.95% per month, over a 12-month term, with no exit fees or ERCs. No personal guarantees were required.

Our loan meant the clients were able to purchase the property by the proposed completion date- capitalising on a fantastic investment for their business. What’s more, the 12-month term gave them plenty of time to pay for the initial operating costs and purchase additional stock. The clients would then work with their broker on the exit by refinancing on the main residence and by taking out a commercial mortgage on the new premises.

The client’s broker later commented:

“This case was difficult initially as the clients had tried to secure their own funding before coming to me. With such a short deadline in which to complete the purchase, I knew I had to place the case with a lender that could perform. mtf was the obvious choice here and whilst the clients had themselves received indicative terms from other lenders at lower rates, I carefully explained that there were aspects of the case that many other lenders would not have understood which would be relevant to this case.

“It was the combination of good advice and robust performance from mtf which made the deal happen with days to spare. The new shop is now open, and we are working through the exit for the clients now.”

mtf’s bridging loan products are designed to meet the many diverse needs of business owners. As a non-status lender, we do not require evidence of trading history, accounts or proof of income, and do not require personal guarantees. This allows us to take a practical, common sense approach to lending.

To find out more, speak a member of our team on 0203 051 2331 or click here to fill out our quick enquiry form.

Investors tap alternative funds in BTL struggle

Property investors are opting to raise alternative finance after struggling to secure buy-to-let mortgages, according to the results from our latest property Investor Survey.

57% of 84 property investors surveyed struggled to secure a BTL mortgage in the past 12 months, with 62% citing affordability criteria as the primary barrier to mainstream funding, followed by age restrictions at 20% and insufficient deposit capital at 18%.

Yet, 43% surveyed filled the funding gap with other sources of liquidity, as 40% of those opted for secured loans and 30% raised bridging finance.

When asked what could mainstream BTL lenders do to improve, 57% of respondents said a more flexible approach to lending was key.  29% said a reduction of processing times would be the best improvement, while 14% said offering better rates would help greatly.

 

The results from our Q1 Property Investor Survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding. However, specialist lenders are stepping in to meet the needs of borrowers and fill the liquidity gap.

For more information on how a short-term loan could help you purchase an investment property, call mtf on 0203 051 2331 or send us a quick enquiry.

How to apply for a short-term loan

mtf specialises in providing fast access to funds with the average bridging loan completed within 2 to 3 weeks of starting an application.

To get started, you can make an application online and provide a few simple details. We do not require you to fill in any long forms and we can give an offer in principle simply by exchanging details by email or phone.

Information you will need:

  • Name
  • Contact details
  • Property address
  • Loan amount required
  • Your plans for the project
  • Confirm whether it is a first or second legal charge

As a non-status bridging lender, we do not run any credit checks as part of our application or eligibility criteria. We will take a view on CCJs, defaults and arrears and we do not always require evidence of trading history, accounts or proof of income. Instead, we prefer to see the potential value of your property and what your plans are in order to make our lending decision.

The offer in principle

An offer in principle (OIP) lays out the basic terms of the loan, stating that we will agree to lend to you at a specific rate and for a specific duration provided that your information adds up i.e the property and the valuations are accurate.

We aim to send you the office in principle within two hours of hearing from you and the initial plans of your project. The OIP needs to be signed on each page in the bottom corner, and on the last page in the box provided and sent back by email, fax or post. As soon as we receive the signed OIP we will provide our bank details for payment of the valuation fee.

offer-in-principle

A property valuation typically used for a bridging loan starts at around £400. The pricing varies because the more expensive and typically larger properties require more work and investigating in order to carry out the valuation.

The valuation and how it works

As soon as we have received your payment for the valuation, we appoint an official RICS valuer to arrange a time to carry out the valuation of your chosen property. This is usually within the first 48 hours and to maintain a speedy process, our panel valuers are instructed to produce reports within around 72 hours.

If you have recently had your property or flat valued by an RICS valuer, this will need to be validated within the last 3 months. Every firm used needs to be accepted by mtf – so we will let you know if this is sufficient or another valuation is required.

property-valuation

The valuation or survey will consider several aspects of the property including the age, the area, its condition, size, fittings, positioning and potential for add-ons. In addition, the role of the surveyor is to highlight any potential issues which could delay or impede your plans for development such as planning permission or toxic materials. You can read our guide here on how a property valuation works. 

Instructing solicitors

Whilst the application is taking place, we will request your solicitor’s details so that we can send them our checklist of requirements. When the valuation report arrives, and the report is eligible to proceed, we will get in touch with your solicitor to issue the mortgage deed for signature.

You will need to meet with your solicitor in person to sign the mortgage deed and provide certified copies of your proof of ID (one piece of photographic and two pieces evidencing your address in the last 3 months e.g council tax bill, bank statement, utility bill).

Fund are released

Finally, as soon as our solicitors receive the requested documentation from your solicitors, we are ready to go, and funds are released to you. To make an enquiry, contact us today.

IN THE SPOTLIGHT: commercial bridging finance

The UK commercial sector has endured some tough times in recent years- with events such as the EU referendum, UK elections, and Donald Trump’s presidency all having their effect on the market. However, in light of slowing growth in the residential market, investors are seeking out opportunities in the commercial market and demand is continuing to increase.

According to the latest data released by HM Revenue & Customs (HMRC), UK commercial property transactions hit a nine-year high, with a total of 127,280 purchases made in 2016/17 –a six per cent rise over figures recorded the previous financial year.

Commercial property is becoming more popular with private investors, many of whom are being driven away from the residential buy-to-let market by the increasing regulation and rising taxes.

Auction house Allsop recently announced it had seen three times the number of buy-to-let converts dipping into commercial property since the cuts to mortgage interest relief for residential buy-to-let properties were announced. Yet, the sector is still greatly under served by mainstream lenders, mainly because of the risks involved due to the volatility of commercial property prices.

Commercial finance is a multifaceted form of finance- there is not a ‘one size fits all’ approach, each loan must be assessed individually and priced according to the risk. The underwriting process is complex and some lenders can be inflexible in their decisions.

london-skyline

Borrowers seeking commercial finance need more innovative options, tailored to meet their needs and one such source that has become a critical tool to fund this community, is bridging finance.

Bridging finance has presented a real-time solution by providing a quick and flexible injection of liquidity to fulfil funding needs. The market is famed for constantly adapting to change and for its product innovation. For example, mtf recently introduced a commercial loan product with a 24-month term, due to demand from our brokers.

A commercial bridging loan can be secured on many property types, including semi-commercial, commercial property, and land. In addition, many income sources ranging from employed, self-employed and sole traders to partnerships and limited companies will be considered. Funds can be used for all existing investments to re-finance and improve cashflow, or to purchase business’s such as hotels, land or retail units.

What’s more, because bridging loans are now much cheaper, they are more appropriate for a wider range of borrowers and a wider range of circumstances.

mtf’s bridging loan products are designed to meet the many diverse needs of commercial property investors. As a non-status lender, we do not require evidence of trading history, accounts or proof of income and do not require personal guarantees. This allows us to take a practical, common sense approach to lending.

As an example, a property development company needed funds to purchase a £4 million commercial asset based in Peterborough, which they intended to convert into offices.

The developers had a specific completion date and were unable to obtain a commercial mortgage in the time-frame required.

As time was of the essence, our broker partner approached mtf and we provided a £1.8m commercial bridging loan, at 45% LTV based on open market value. Interest was retained at 0.95%, over a 12-month term, with no exit fees or early repayment charges.

In just under 3 weeks, the clients were able to purchase the commercial investment asset and the 12-month term gave the client plenty of time to refinance with a commercial mortgage.

At mtf, we remain committed to offering sensible, flexible, non-status bridging finance loans to commercial property investors and SMEs.

Product highlights:mixed-residential

 

  • Rates from 0.95%
  • Up to 65% LTV on open market value
  • Loans from £100,000- £5,000,000
  • Terms from 3-24 months
  • Commercial/ semi-commercial/ HMOs
  • No exit fees
  • No ERCs
  • Whole of England coverage

why use mtf?

mtf is here to work with you to get your commercial bridging loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears, and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and your future plans.

  • No personal guarantees required
  • No credit scoring
  • Lend to foreign nationals and offshore companies
  • Underwritten offers issued within the hour
  • Average completions within 9 days

Don’t miss out on an investment opportunity, call mtf on 0203 051 2331 or apply online to see how we could help turn your aspirations into achievements.

IN THE SPOTLIGHT: auction finance

Driven by attractive prices and the speed at which a deal can be completed, property auctions are appealing to a wider audience, including buy-to-let investors, who are increasingly visiting auction rooms in a bid to find a good deal.

Property investors can benefit from buying a property at auction below market prices, typically within a 28-day time frame. They can also benefit from contributing smaller deposits of around 10%.

However, an investor wanting to take advantage of these opportunities can often face barriers when it comes to raising funds. Either they are unable to get a mortgage because the property requires major work, or it is virtually impossible to secure a mortgage in the tight 28-day time frame.

live-auctionThese circumstances have caused auction buyers to rethink their financial arrangements and seek alternative methods of funding, with auction finance offering a real-time solution to the funding gap. mtf has seen a notable increase in applications from investors and developers wanting to buy properties at auction.

One of the main benefits of an auction finance loan is the speed at which funds can be delivered. Where a mainstream bank may take several months to put together a loan for a borrower, an auction finance company is often able to make lending decisions within hours of the initial enquiry, so funds could be released in less than a week.

mtf completed a case for a client who needed £215,000 to complete an auction purchase and make renovations to the property. Their mortgage lender couldn’t provide the financing in the time-frame required and so they faced losing the deposit.

mtf provided a £215,000 loan, at 65% loan-to-value, over a six-month term, with no exit fee or early redemption penalty. We managed to provide the loan within 24 hours, saving the client’s deposit. They then had the time to renovate the property and increase its value before refinancing out of the loan with a buy-to-let mortgage.

Some auction finance providers can work with clients to ensure they go into an auction fully prepared and at a competitive advantage. Our clients look at catalogues to identify target properties, setting themselves a maximum threshold they want to pay. We can review their loan options at an early stage, prior to auction, and provide them with indicative terms. This way they can go and bid with confidence, knowing they have adequate finances in place so that a transaction can complete with minimum fuss.

product highlights

  • Rates from 0.89%
  • Up to 70% LTV on open market value
  • Loans from £100,000- £5,000,000
  • Terms from 3-24 months
  • Commercial/ semi-commercial/ residential assets
  • No exit fees
  • No ERCs
  • Whole of England coverage

why use mtf?

mtf is here to work with you to get your auction finance loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears, and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and your future plans.

  • No personal guarantees required
  • No credit scoring
  • Lend to foreign nationals and offshore companies
  • Underwritten offers issued within the hour
  • Average completions within 9 days

Don’t miss out on an investment opportunity, call mtf on 0203 051 2331 or apply online to see how we could help turn your aspirations into achievements.

Specialist lenders step up to help property investors

According to mtf’s latest Property Investor Survey, 75 per cent of property investors were unable to secure mainstream funding in the past 12 months, with nearly half (44 per cent) attributing affordability as the main barrier.

 

obtain-mainstream-funding

 

34 per cent of those surveyed said they were unable to obtain mainstream funding due to adverse credit and 22 per cent blamed stricter lending criteria.

 

what-reason-refused

 

However, 75 per cent of investors revealed they had managed to raise alternative finance.

 

raise-alternative-finance

 

47% of investors got a secured loan as an alternative, while 39% opted for a bridging loan.

 

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Three quarters of investors intend to expand their portfolio in 2017, with 67% targeting London and 33% looking to buy in the South East, in an encouraging move despite changes to tax relief for residential landlords.

A majority of respondents said scrapping an additional 3% stamp duty hike on buy-to-let and second homes would greatly help, when asked how the UK government could improve the private rented sector.

The results from our Q1 Property Investor Survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding.

It’s certainly been a tough 18 months for landlords but alternative lenders are stepping in to meet the needs of borrowers.

For more information on how a bridging loan could help, call mtf on 0203 051 2331.

Short-term refurbishment finance

Did you know a bridging loan could help you enhance the value of your investment property?Refurbishment-Loans

With mainstream lenders implementing tougher restrictions, it has been harder for property investors to get a buy-to-let mortgage, faced with more hoops to jump through in a time-consuming process. This can hinder those requiring fast access to funds.

Bridging finance has been able to fill the void, gifting investors the ability to make the necessary renovations by providing funds with speed and agility.

Bridging loans for refurbishment purposes are available to property investors, landlords and developers looking to upgrade their residential, commercial or mixed use investment asset, before renting it out or selling on at a higher value.

As an example, MTF was approached by a developer focussed on an investment property worth £330,000 in London that had a good letting potential.

He wanted to buy, refurbish and then rent it out but was unable to get a buy-to-let mortgage as the property was uninhabitable.

MTF provided a £214,500 bridging loan within a week, at 65% loan-to-value, over a 12 month period with no exit fee or early redemption penalty.

Our bridging loan gave him the funds to buy the property and the time needed to carry out the works in order to significantly increase the value of the property. The borrower will then refinance out of the bridging loan with a long term buy-to-let mortgage from a bank, against the higher value.

MTF are here to get your short-term refurbishment finance loan completed in a matter of days. As a non-status lender, we will take a view on CCJs, defaults and arrears and do not require evidence of credit history, accounts, or proof of income.

Don’t miss out on an investment opportunity, call us on 0203 051 2331 or apply online to see how MTF could help turn your aspirations into achievements.

Delays biggest challenge for brokers following MCD

Delays to mortgage applications have caused brokers the most difficulty following the implementation of the Mortgage Credit Directive (MCD), according to our  latest Broker Sentiment Survey.

39% of the 101 brokers questioned in the quarterly survey said delays to attaining a mortgage caused the most difficulties since MCD, followed closely by 31% of brokers who blamed complications with new affordability models.

question-1-mcd-mtf

The new MCD rules were implemented by the Financial Conduct Authority (FCA) in March, designed to foster a single market for mortgages and protect consumers.

Some 40% of brokers said borrowers looking to remortgage had been most affected by the new MCD rules. The second most affected by MCD were landlords at 21%.

question-2-mcd-mtf

In the run up to MCD, many brokers feared the new rules would lead to a decline in loan volume however, only 15% of brokers surveyed said they had experienced an actual drop in business since it was introduced.

 

Question-3-MCD-MTF

Specifically, 62% of brokers questioned experienced a rise in bridging loan volume in the second quarter of 2016, while 38% said bridging volume remained the same. No one questioned saw a decrease in bridging volume during the quarter.

Development projects were the main reason broker’s clients took out a bridging loan during the second quarter at 42%, followed by mortgage delays at 25% and purchasing an investment property at 16%.

For the sixth consecutive quarter, the South East saw the biggest demand for bridging loans in the UK at 39%, down from 56% in the first quarter of 2016. London saw the second highest demand for bridging loans during Q2 2016, at, 31%- rising significantly from 20% in the previous quarter.

43% of brokers surveyed think the new MCD rules have not improved the market, while 21% said there was an improvement. 36% were undecided.

The results from our survey reflect the introduction of stricter affordability and stress testing, which may be leading to delays on mortgage applications. Equally, the introduction of the Consumer Buy-to-Let has led to a transitional period, during which brokers and borrowers alike become familiar and comfortable with this new regulatory class.

The MCD creates an opportunity and a challenge to both the mainstream and bridging finance markets, which both sectors seem more than well placed to face.

For more information on how a bridging loan could help, call MTF on 0203 051 2331, or fill in our contact form.

Speedy bridging loans help investors prior to stamp duty rise

Buying an investment property was the main reason people took out a bridging loan in the first quarter of 2016, according to MTF’s most recent quarterly Broker Sentiment Survey.

Some 39% of the 106 brokers surveyed said the purchase of an investment asset was the main reason their client tapped bridging finance in Q1 2016. Property investors needed fast access to cash in order to complete any purchases before hefty changes to stamp duty land tax kicked in.

A 3% increase in stamp duty on additional properties above £40,000 took effect from April 1 2016, impacting buy-to-let properties and second homes.

reasons-for-bridging-loans

A massive 76% of brokers questioned said they experienced a rise in bridging loan volume during the first quarter, as the financial product is increasingly seen as an important alternative source of liquidity, filling a funding gap left by mainstream lenders under pressure from increased regulation and capital requirements rules.

rise-in-bridging-loan-volume

Speed of completion was the most important factor under consideration when choosing a bridging lender according to 40% of the brokers surveyed, followed by interest rates and pricing at 25%.   choosing-a-lender

When asked ‘where would you like to see more product enhancements in the bridging finance sector?’ 53% of brokers said they would like greater flexibility from lenders on commercial lending.

product-enhancements

For the fifth consecutive quarter, the South East saw the biggest demand for bridging loans in the UK at 56%, up from 50% in the fourth quarter of 2015. London saw the second highest demand for bridging loans during Q1 2016, at 20%.

chart-with-popular-areas

Demand for bridging finance remained strong in the first quarter as people continued to buy properties, despite volatility caused by wider macro events including a potential Brexit.

A majority of brokers surveyed (57%) would like the UK to remain part of the European Union, as opposed to 29% that would support an exit.

EU-chart

The results from our survey highlight how many buyers wanted to complete on investment assets before expensive changes to stamp duty came in. They turned to bridging finance, due to the fast and flexible nature of the product, enabling them to take advantage of opportunities on offer, before putting in place a longer term financing solution.

Due to the speed in which bridging lenders can make decisions and funds can be distributed, bridging finance can offer a practical solution to a plethora of situations including auction purchases, renovations and for business purposes.  Despite uncertainty in the wider markets, we expect strong demand for bridging loans to continue.

For more information on how a bridging loan could help, call MTF on 0203 051 2331, or fill in our contact form.