We are delighted to announce the launch of our new Flex to Buy mortgage for property investors who want to be ready to buy new stock quickly when the opportunity arises – at an auction for example. We know that landlords can create a lot of value by being able to move quickly on a purchase – Flex to Buy gives active investors an ability to sign contracts at the drop of a hat, secure in the knowledge that they have committed funding already in place.
Flex to Buy grants a stand-by mortgage secured against one or more existing buy to let properties. No interest is charged until funds are drawn down and, since all interest is rolled up and paid at redemption, there is no cashflow strain.
Castle Trust does not take a charge over the property being acquired so its value and condition is immaterial. This means that landlords can buy the property for cash, take the time and money they need to refurbish it and then let it, all without having to worry about securing and servicing a mortgage.
Because the ERCs expire after only six months, you can then switch the finished property into a cheaper long term BTL mortgage with a mainstream lender. Or you can switch to a longer term Castle Trust product!
The minimum facility is £250,000 with a maximum of £5m or more by negotiation. All facilities can be drawn in tranches as required, with a minimum of £100,000 per tranche. The ERC clock starts ticking from the date of first drawdown but we do ask that the first draw is no less than 50% of the total facility.
The cost of the stand-by facility is a simple flat fee of 2% to secure the funds which can then be drawn as required during the next 12 months. After 12 months, any undrawn facility lapses unless renewed. Once drawn, the borrowing is for a further 12 months using our standard Flex6 product pricing – click here for the Flex 6 calculator. Your client locks in the cost of the borrowing when they accept the stand-by facility offer.
Feedback from landlords has proved that there is a clear gap in the market for this type of product and we are looking forward to working with you to create real competitive advantage for your clients.
Happy hunting!