Every month brings its own mix of cases: some standard textbook, and then there are the cases that keep us on our toes.
Below is a rundown of what has been landing in the inbox this month across bridging, development and secured loans, and how we have made them work for your clients.
Bridging Loans
Second charge bridging where works are planned
This one comes up more often than you would think, but the appetite for it is limited. Your client needs a bridging loan secured as a second charge but they’re also planning works on the property and most lenders won’t touch that combination.
With us, borrowers can access an initial loan based on the property’s current value to get refurbishment works started. Further funds are then released in stages as works are completed, with the total loan amount based on the projected Gross Development Value (GDV).
This is important because property value doesn’t usually increase steadily during a refurbishment – most of the uplift comes once the works are finished.
Development Finance
Development exit / finish-off funding
Sometimes a development is complete (or close to completion), but the existing development finance still needs to be repaid, and not every lender is comfortable stepping in at that stage.
We can provide development exit funding to repay the current facility, giving borrowers up to 18 months to sell units or arrange a longer-term refinance without the pressure of an imminent lender deadline.
We can also support projects that are nearly finished but still require additional time and funding to complete. Where no more than 10% of the original build costs remain outstanding,
We may be able to fund the remaining works while also providing breathing space to deliver the planned exit strategy.
Secured Loans
Clients with a recent IVA or DMP
Active debt management plans and IVAs are a flat no from most lenders. But for clients who are working through their situation responsibly, we think that deserves a bit more credit.
We have seen a steady increase in these cases recently, and where borrowers can show a strong repayment track record, Masthaven may be able to use loan funds to settle the DMP or IVA as part of the transaction.
That can help clean up the borrower’s credit profile, remove restrictions against the property and improve future refinancing options once the arrangement has been cleared.
Contractor income
Contractors often don’t fit the standard income assessment. Short contracts and gaps between jobs can make the picture looks messier than it actually is. For the clients who are earning well and consistently, the income just needs to be assessed properly.
We can consider contractors with as little as three months’ trading history, provided there is at least one month remaining on their current contract at the point of offer.
Income is assessed using the contractor’s day rate, annualised across a five-day week over 46 weeks of the year, allowing for holidays and gaps between contracts.
Recent job moves
Most lenders want employment history; but just one month in a new role or a job change that coincides with the loan application can throw everything off, even if the client may be earning more or is in a more stable position.
We can take a more practical view. We require a minimum of three months’ overall employment history and can accept income from a new role once the borrower has completed at least one month in the position, provided they can show continuous employment from their previous role.
Get in touch with Masthaven Finance
If any of the above looks familiar, send us a quick enquiry – we are always happy to talk through a case with you.
