How to Get 100% of the Purchase Price

THE QUESTION

Is it possible to finance a well below market value property with 100% of the purchase price via bridging - and then refinance the next day to a BTL mortgage? Doing this would you get a true valuation of the correct value when you refinance and not the BMV purchase price?

THE ANSWER

The chances of you borrowing 100% of the purchase price are remote.  The only ways you might be able to do this are:

• To pick the property up 30%+ below the asking price
• Put up a property you own already with little or no mortgage on it as additional security.

There are a few bridgers who will lend on value rather than purchase price and this will reduce, rather than eliminate, the need for a deposit.

For refinance, you won’t get it mortgaged on day one, but you can get it remortgaged within 6 months by using the right mortgage lenders.  However, be prepared to pay more than leading market rates for this.

There is only one way to get it valued above purchase price paid - do some work to improve it and evidence that to the lenders valuer.  Just buying cheap doesn't cut it, the mortgage lenders will only lend on what you paid for it regardless of market value, unless you can convince them you have significantly added to the property’s value.

I have been training investors how to use bridging intelligently on my courses since 2013 - check out my YouTube channel for free bridging tips.

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