Securing a self-build mortgage for extensive refurbishment works

What was the situation?

The client approached LDN Finance looking to purchase a property that needed extensive refurbishment works. They intended to gut-out the property and fully refurbish it, including a new kitchen and bathroom.

Initially, they contacted us thinking they needed a bridging loan. However, it quickly became apparent that they required a greater amount of development than first anticipated, and a bridging loan may not be the best solution.

What was the issue?

At the time of purchasing said property, the client didn’t want to sell the property they were living in until the refurbishment works were nearing completion on their new place. It also came to light that their current mortgage could not be ported to a new one. Finally, the client did not have enough of a deposit for a bridging loan.

What was the process?

After careful consideration, we explored the option of a self-build mortgage which was far more suitable for their requirements. However, despite the extensive refurb works required, the property was already erect and not considered a true self build, despite the bad state of repair it was in.

I needed to speak to a few lenders that were willing to consider this application where I could explain the intricacies of the case.  Following a handful of discussions with multiple lenders, 1 in particular was willing to take a view on the case and the client’s circumstances.

What was the solution?

Even though this type of application was outside of their normal criteria, the lender was willing to take a view on it based on the client’s affordability and plans for the property.

I was able to secure a self-build discount mortgage up to 80% LTV. This was an excellent solution for the client because they are only paying interest on each drawdown of funds, as and when needed. The facility secured also included no tie-ins so the client is able to switch to normal mortgage without penalties after 2 years.

Lending solutions with LDN Finance

Are you exploring your mortgage options for refurbishment? Perhaps you’re looking at a holiday let property? We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.