Using a light refurbishment loan to sell an unmortgageable home

Our team at Cornerstone Commercial Finance recently helped a client to obtain a bridging loan to assist with the purchase of a property which was valued at a purchase price of £140,000. The desired property was deemed unmortgageable, so the initial plan was to spend £45,000 on refurbishing the property to get it into a position where the client could sell on the open market and make a decent profit.

Our team approached Shawbrook Bank to obtain the funding and they were able to provide a Light Refurbishment Loan product at 85% Loan to Value. This finance product allowed the client to raise 75% of the purchase price, as well as providing a further 10% for some light refurbishment works.

By working closely with Shawbrook and the client, Cornerstone Commercial Finance were able to provide the client with this finance solution that will enable them to refurbish the property and increase its value. The rate was also achieved at 0.85%pcm over a 12 month fixed period, and importantly with no exit fee, so the client will now be able to sell the property when it’s ready with no further charges.

Benefits of using a Bridging Loan for unmortgagable properties

Bridging Loans, or Light Refurbishment Loans, provide funds for a variety of purposes to improve the quality of a property or for purchase. These loans are arranged and released fast, which can be a benefit in these situations to get the ball moving and eliminate any delays for investors. Bridging Loans can also fund 100% of the property price, meaning a deposit is not often needed.

What makes a property unmortgagable?

  • The property is uninhabitable
  • Properties without a kitchen or a bathroom
  • Properties with structural problems
  • Properties of non-standard construction
  • Japanese Knotweed and other invasive weeds
  • Severe damp, dry rot and wet rot
  • If your property has never been registered with the Land Registry

Using a Bridging Loan broker

If you are considering purchasing uninhabitable property, or have inherited uninhabitable property, one of our expert bridging finance brokers can help you find the best bridging loan deal. Contact us today and one of our advisers will be in touch.