Initially launched in the North West in July, the product provides access to people in the building trade and DIY enthusiasts to fund renovation and refurbishment projects.
Up to 100 per cent of the purchase price is available for periods between two months and 12 months provided the applicants can evidence the ability to fund the necessary materials and/or labour to increase the property value to its true market value. Advances in excess of 100 per cent are available providing a suitable residential or commercial property is available for security on a second charge basis to provide the funds to restore/re-furbish the property.
Properties can be purchased via any source, including auctions, provided the funding level is preapproved. Advances can be arranged in 48 hours. There is no set criteria on property type, condition or structure provided that the necessary work can be carried out within an agreed budget and a given time scale, and the applicant has the expertise available for such a project.
Alan Hill, FMO’s chief executive officer, said: “We have been inundated with enquiries since our launch. Following the success of this product in the North West, we are delighted to be able to offer this product to the wider market.”
FMO are offering terms on these funds on a case by case basis, with typical rates between 1.5 per cent and 2.5 per cent per month and the cases are underwritten with a buy-to-let (BTL) mortgage offer to replace the initial funding once the property is in a traditional mortgageable condition. Introducer/Broker procuration fees of 0.6 per cent to 2.0 per cent of the advance.
Funds can be arranged with or without a conventional lender in place to mortgage the property on satisfactory completion of all necessary restoration/refurbishment work. Interest can be rolled up (i.e. no monthly re-payments required) depending upon the project and assessed on the merits of each application.
