The Progressive Property Podcast Top tips for Refinancing!
Discover the top tips for refinancing your property, the dos, and don’ts of property, how to attract JV partners and the risks of refinancing with a mortgage. Tune in to learn how to maximise your profits and build your portfolio with the right property refinancing.
KEY TAKEAWAYS:
-You could purchase the property using yours or your JV partner’s cash, by borrowing money or by taking out a mortgage using a deposit.
- There are some risks of refinancing with a mortgage. If you buy a property with a mortgage from a bank and you put down a deposit of 25% and have the remaining mortgage of 75% with the bank. If in six months’ time, you go to refinance that property with the same bank it is most likely that the bank will not value the property any higher than they gave you six months earlier.
-What some people may risk doing, is to buy a property with a mortgage from one bank do a small refurb, six months’ time refinance with a different bank than who the initial mortgage was taken out with. That can work in terms of the refinance, but you run the risk of getting blacklisted by the first bank.
- Mortgage lenders like to see you keeping the product with them. Therefore the smart and professional thing to do is to use cash or a loan to purchase the property, do the work and then six months later, refinance onto your first mortgage product, rather than moving from one lender to another.
- When applying for a mortgage, it is vital that you get a mortgage broker. They are able to get approval done that you would otherwise not be able to get yourself. They have good relationships with certain lenders and know what sort of things that you need to have included in your application for the lenders to say yes to your loan.
- When choosing a mortgage broker, it is important to choose one that understands buy to let property. It is important that you stick to the same broker, don’t mix and match every few months.
- When the valuer turns up to value the property. Do not try and tell them what you think it is worth, however there are a number of things you can do to help you get the valuation to what you are looking for.
- Get pictures of the property before you do any refurbishments.
- Get pictures of the property in its worst possible condition.
- Get pictures the day the valuer comes to see the house.
- This can help you to show them how you have added money from the purchase price. You showing his pictures from six months to today is one of the most important ways for you to help him come to realize that the value is higher.
- Give them a copy of the tenancy agreement. He will base his valuation on a percentage of the rental income that you’re achieving for that property.
- Include a schedule of the works that you have done to the property since you purchased it to show that there have been a lot of things done since you bought the house that have added value.
-Look for properties online that have sold with a higher comparable as you’re looking for as a value for yours.
BEST MOMENTS
“The mortgage broker earns there money for you”
“How is this property worth more money today than it was six months ago?”
VALUABLE RESOURCES
https://www.amazon.co.uk/No-Money-Down-Property-Investing/dp/1909846767
https://www.youtube.com/watch?v=o8TZdualhcw
ABOUT THE HOST
Kevin McDonnell is a Speaker, Author, Mentor & Professional Property Investor. He is an expert when it comes to creative property investment strategies. His book No Money Down: Property Invest talks about how to control and cash flow other people’s property to create financial freedom.
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