The ‘Dual’ product has been created to boost the portfolios of buy-to-let (BTL) landlords with the option to get a mortgage application approved in 28 days from application. The bridging loan also ensures that borrowers will have the equity to ensure their purchase goes through without any danger of a lack of finance, as the mortgage and loan come from the same source.
Created by UX Mortgages and bridging loan provider Tiuta, the Dual plan offers 85 per cent loan-to-value with an option to obtain 100 per cent finance on the BTL purchase. The required rental coverage is 75 per cent of the initial pay rate, with daily interest charges set after the first month on the loan.
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By doing one application for both products, there is a guarantee on the mortgage and loan with the underwriting done by the same people. The rates are typically at 6 per cent with options including fixed and variable rates and offers with or without early repayment charges. Procuration fees of up to 1 per cent are offered with 1 per cent cashback payable to the borrower on completion.
Fees include £800 for administration, 1.5 per cent on completion of the loan and a 2.5 per cent charge on the bridge. The arrangement fee is set at 1.5 per cent.
Randeesh Sandhu, managing director of UX mortgages, suggested the product was a first for the market, and expected it to be popular. He said: “We saw a hole in the market for a good concept and we wanted to create something the market hasn’t got. The Dual scheme offers the added benefit of allowing capital raising as investors can spread their money into further purchases.”
Jonathan Barnett, director at All Mortgage Matters, welcomed the move. He said: “It is an excellent idea that takes the pressure off people going to an auction who need to raise funds very quickly. I can see something like this being very useful.”
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