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Finding Property Finance

Funds

First, you would need property finance. In theory, it should cover all of your project’s requirements. You have two choices. Either you go to a bank and work out the arrangement yourself or you employ the services of a commercial loan broker.

One advantage of getting commercial brokers is that they can get the best deals based on their knowledge of the market, and the plus factor of being able to tap most of the mortgage lenders’ network.

Generally, banks are the principal sources of these traditional funds. However, if you choose to arrange your own financing, you need to brush up on the following.

 

Loans

Basically, a mortgage is a loan you use to buy a property (or land or both). The lender (a bank or a financial institution) acquires the property as security to hold until the borrower (you) have paid off your loan (residential mortgage).

The payment period is usually set at a 25-year time frame on the basis of the borrower’s retirement age at 65. (Borrowers over 40 years old have shorter payment scopes.)

Because of today’s present difficulties, some lenders now offer longer repayment time frames. Most lenders also base your loan amount to your earning capacity to make sure you can pay them.

 

Buy-to-let

Buy-to-let mortgages are different. You borrow money to buy another property with the intention of renting it out to create the income to pay the monthly arrears.

Your lender usually asks an independent practitioner to assess the property’s potential income to make sure you can make the payments. Or, you may have to pay a bigger initial deposit to trim the amount of the future payments.  Are you enterprising enough?

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