The property market can be a complex one, particularly if you
need to raise finance for something less straightforward than a residential mortgage. Joseph Aston, Sales and Commercial Director at Aria Finance, offers some insights
What sort of customers does Aria Finance serve?
We work with brokers and direct clients looking for funding on a range of property projects. From a first-time landlord to a seasoned portfolio landlord or experienced property developer, Aria Finance have the knowledge and expertise to deliver solutions across the property investment lifecycle no matter how complex the circumstances.
Why might I need a bridging loan?
Traditionally bridging was used for auction finance or to rescue a broken chain, it’s now a sophisticated product used for a variety of reasons, including:
- Broken property chains
- Downsizing
- Un-mortgageable property
- Renovations / conversions
- Lease extensions
- Planning permission
- Auction purchases
There are many benefits to bridging loans such as speedy application, quick transfer of funds and broader lending criteria – to name a few.
If bridging finance is new to you, the process can feel overwhelming. This is where Aria Finance can help. With over 20 years’ experience of specialist lending and our large business volume, we know our lenders very well, and often have access to exclusive rates that other providers and intermediaries can’t access.
What situations might complicate some first charge mortgages?
Sometimes you or your desired property, just won’t fit the generic criteria set by High Street lenders – and that’s where Aria Finance can help.
We’ll assess your situation and navigate the options for scenarios including:
- Customers with adverse credit
- New build property purchases
- Right to buy property purchases
- Non-standard property purchases
What is a second charge mortgage and how could it work for me?
A Second Charge mortgage is a secured loan that allows the borrower to use equity in their existing property as security for the lender. The primary mortgage taken out by a borrower is known as a “First Charge”, so these secondary mortgages are referred to as “Second Charges”.
In the past, Second Charge mortgages had a negative reputation as a high-risk, high-rate and heavily subprime option. But this all changed in March 2016 with the introduction of the European Mortgage Credit Directive (MCD), designed to enforce responsible lending.
The time from application to completion is often just weeks or even days. And they’re fully transparent and regulated by the Mortgage Conduct of Business (MCOB), with clear terms that treat customers fairly.
They can be used when you:
- Need to raise capital quickly
- Have a bad credit rating
- Want to avoid paying an ERC on an existing mortgage
- Do not want to lose a low interest rate on an existing mortgage by remortgaging
- Want to borrow more than the maximum limit of an unsecured loan or have had an unsecured loan declined
- Wishes to carry out home improvements
- Wish to use fund for something traditional lenders won’t allow such as debt consolidation, business funding, tax bills, school fees or raising a deposit for an investment property
How does a Buy-to-Let mortgage differ from a residential one?
A mortgage on a residential property that the borrower intends to rent out instead of reside in themselves is a Buy-to-Let mortgage.
Unlike a residential mortgage, a buy-to-let mortgage is unregulated and the way in which lenders will determine how much you can borrow is less straightforward. While a residential mortgage will allow you to borrow 4 – 4.5 x the household income, a buy-to-let mortgage lender will use the rental income to calculate if it will cover 125% of the mortgage payments. Many lenders will require you to earn a minimum of £25k for a buy-to-let mortgage however some specialist lenders on Aria Finance’s panel have no minimum income requirements.
What are the conditions of commercial mortgages?
As commercial mortgages are used for business purposes, typically limited companies, SPVs, LLPs, SIPP’s, trusts, off-shore companies, partnerships and sole traders can apply for a commercial mortgage (although this will vary between lenders).
Clients with impaired credit and business start-ups may also be able to apply for a commercial mortgage. Depending on the scenario, some lenders will even consider applicants with no minimum income, no previous investment experience and at any age.
While different lenders will have their own eligibility checks, at Aria Finance we would typically want to check the following:
- Cash flow
- Outstanding debts
- Projected business income
- Ability to pay the deposit and source of funds
- Income (full accounts of trading business) credit and assets
- 2 year’s trading accounts
- Last 3 months’ business bank statements
- Proof of ID (certified copy of passport or driving licence)
- Proof of residency (utility bill or bank statement)
How can Aria help me with development finance?
Aria Finance can assist you with development finance by providing access to an extensive network of lenders that specialise in funding ground-up property projects for developers. These funds are versatile, covering expenses such as land or property acquisition, project completion, and payments to contractors and suppliers.
Recognising the intricacies and time constraints of large-scale developments, Aria Finance caters to the diverse needs of both seasoned developers and those venturing into property projects for the first time, offering valuable support and guidance throughout the process.
What’s the story behind Aria Finance?
Aria was formed in 2022 and is the exciting combination of two market-leading master brokerages; Enterprise Finance and Vantage Finance. Individually these brands stood firm in the market, however together, they bring over 20 years of broking and specialist distribution expertise.
Where can I find out more about Aria Finance?
Visit Aria Finance’s website to find out more about how they can help you with your property finance goals: https://www.ariafinance.co.uk/
If you have any questions or would like to discuss a deal please email sales@ariafinance.co.uk
