Bridge-to-let finance - one lender or two?

THE QUESTION

I’ve heard that if you use the same lender for the refinance on a buy/refurb/refinance project you can get down-valued.  Does that mean you should always use different lenders?

THE ANSWER

There are very few lenders offering bridge-to-let products, essentially it requires a mortgage lender who is also happy to offer a bridging product and lenders like that are a rarity among mortgage lenders.

The advantage is that for a buy/refurb/refinance project, you can move seamlessly from bridge to mortgage without extra fees or needing to wait 6 months to apply to for refinance.

Bear in mind that, compared to a true bridger, the initial underwriting can take longer (massively longer with one B2L lender) because they are underwriting the mortgage at the back end to begin with, not just the bridging part. 

Also the mortgage rate at the back end may also not be as competitive, depending on the work you are doing to improve the property, as you could get by separating the bridging and mortgage elements.

Their valuer will also give you an end, as well as current, value at the outset based on the works schedule you provide them with.  You may conclude that this end value is not as good in some circumstances as you may get with a different mortgage lender. Sometimes this happens, sometimes not.

This is where working with a good broker will benefit you, as they will look at both ways of structuring the deal and guide you to give you the best return on your investment.

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