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Specialist Finance
Specialist finance refers to bespoke lending products tailored to meet the needs of borrowers who are looking to invest within property or a business. These types of lending products are designed for specific scenarios that require more flexibility or a different approach than standard mortgage products, such as a main residence mortgage. Below, we look to cover some of those typical specialist requirements, but this is not an exhaustive list, so please do speak to a member of the BBA Team.
Second Charge Loan
Sometimes referred to as ‘a second mortgage’, they have secondary priority behind your main (first charge) mortgage and are often taken out to raise additional funds. This type of facility can be arranged on your main residence for business purposes or on an investment property for any legal purpose.
The benefit of a 2nd charge loan is that it can facilitate a quick release of equity, without impacting the existing first charge terms i.e. resulting in a change to a different rate or paying early repayment fees.
A Buy-To-Let mortgage can be arranged over 10-25years with fixed rate periods typically being for 2years, 3years, 5years or 10years. This type of mortgage is for first time landlords, new landlords and portfolio landlords. BTL mortgages are not regulated by the FCA, with rules that differ from that of your main residence mortgage.
This can be a great way to raise capital for up to 80% of the current value, and can be used by way of a purchase or for refinancing and taking advantage of capital growth within the property over time.
Within this space, you could be a developer who builds-to-rent, creating new property with the sole purpose of retaining at the end of the project.
HMO
A House in Multiple Occupation (HMO) mortgage is a loan related to a property that is occupied by multiple residents/tenants. Designed for multi-let properties, the terms and conditions of an HMO mortgage permits the letting of a purchased property under multiple tenancies.
HMO properties require a licence to be obtained from the local council, which is subject to an inspection and must be renewed every 5 years.
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Buy-To-Let/HMO Mortgage
Multi Unit Freehold Block
A Multi-Unit Freehold Block, also known as a MUFB, is a block of flats/apartments/studio’s held on a single title. Therefore, there is only a freehold title without any separate leaseholds created. Common examples include houses that have been converted into multiple flats or purpose-built flats/apartments or student accommodation.
A holiday let mortgage is a loan specifically designed for properties let out as holiday accommodation. This type of accommodation can often have restrictions on the title, stating a maximum period of time any one person can stay in the property for, which ensures it can’t be used as a permanent residence.
You may be able to make more money overall with a holiday home vs a buy-to-let but the income fluctuates. This means the rental income you’ll get, which is needed to work out how much you can borrow, is calculated based on previous trading history and/or expected occupancy rates.
Holiday Lets
Commercial Mortgage
A commercial mortgage is a medium to long term loan that can be used to fund the purchase of property for commercial use or to buy business premises, or an existing business.
Asset Types:
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• Offices, professional practices
• Pubs, bars, and restaurants
• Hotels, guest houses and B&Bs
• Retail units and business parks
• Warehouses, factories and industrial units
• Large HMOs/unusual residential investments
• Care homes