Non Status Loans
There are two types of Non-Status loans, Short-Term (often referred to as bridging) and Long-Term.
The Short-Term is often used if a client wishes to purchase a property or land to sell on in a short time, or does not have a deposit and wishes the advance to be based on valuation and not purchase price. Going down this route if it is the clients intention to keep the property long-term will usually result in a refinance after 3-6 months, which we will also arrange.
On Short-Term funding, which can be from 1 month to 12 months will attract an interest rate ranging from 1% - 3% per month depending on the quality of the security.
This type of funding allows for any amount of adverse credit history and is usually dependant on valuation only. Loans can be up to 80% of the property value and ignore purchase price. For example if a property values at £1 million you can borrow £800,000 and if you are able to negotiate a purchase price of £800,000 you have finished up with 100% finance. After 3-6 months we would then move this to long-term funding at a manageable interest rate. So although the initial interest rates are higher than normal rates, it serves a purpose, in allowing you to acquire property or land, for very little deposit.
Long-Term Non-Status finance again ignores adverse credit history and is based on valuation only, but this cannot exceed 75% of valuation or purchase price, whichever the lower. So on a purchase you would have to put in 25% deposit or other security and on refinance you can raise up to 75% of value. Repayment is any period from 5 years to 30 years and interest rates range from UK Bank Base + 2.5% to UK Bank Base + 5%, again depending on the quality of the security.
Most Short - Term (bridging loans) are usually refinanced into the Non-Status Long Term facility.