How do I raise finance?

The question that is asked all the time by property investors is - how do I raise the finance to begin?  If you are starting from the great perspective of having a good chunk of capital or you are able to release equity from a property to work with when you begin to buy property; then that is great. 

It makes the process much easier as it gives you the confidence to know that any offer you make is backed up by funds in the bank and therefore offers you greater bargaining power.  Coupled with the right knowledge and guidance, it also means that you can start your search sooner rather than later and get going on your chosen strategy.

Raising Finance

If you are trying to raise finance, then it would be a good idea to check your credit rating and mortgage status.  Speaking to a mortgage broker who specialises in lending for investment purposes about your ability to raise a mortgage would be a good place to start to see if you’re at least in the running in this sense. 

Regarding raising finance for the deposit or to buy outright, this can be a tricky subject.  There are a number of ways in which you could pull money together and we have listed them below:

  • Credit Card (short term)
  • Borrow money from relatives or very close friends
  • Borrow money (in the form of a loan) from friends or acquaintances
  • Raise Bridging Finance (in a number of different ways)
  • Bank Loan
  • Angel Investor/High Net Worth Individual/Sophisticated Investor
  • Vendor Finance (in certain circumstances)

 Check out our commercial finance and our mortgage section for more information on raising finance. 

Buy To Let Tax Changes Within Section 24 Of The Finance Act

Landlords could be set to lose out on tens of thousands of pounds of income from their buy to let investments, starting next year when proposed tax changes come into force. Under Section 24 of the Finance Act - introduced by George Osborne in his Finance Bill last summer – landlords will be taxed on the turnover of their property, rather than just the profit. It applies to existing as well as future buy to lets but not to foreign landlords (since they are not taxed under the British system).  Tax to be fully operational by 2020 The government plans to phase in the new ruling on a sliding scale from April 6 next year so that landlords pay 25 per cent in the first year, 50 per cent for 2018 and 75 per cent the following year.  By 2020 the full 100 per cent tax bill will apply. This means...
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Stretching margins

  New data shows UK banks raised mortgage rates despite falling interest rates, making life harder for borrowers and savers alike.Shortly before the Bank of England pushed interest rates to a fresh 300-year low early last month, a number of UK lenders chose to raise their mortgage rates, leading many commentators to call into question the benefit of the central bank’s action. Banks’ customers now face a two-pronged challenge – a near-zero return on their savings, and an unnaturally high interest rate on their mortgage.This was not what the Bank of England had envisaged when it lowered rates – knowing that lower rates would hurt savers, it hoped that banks would pass on lower borrowing rates too, thereby providing a boost to economic activity and risk-taking.Recent research by Moneyfacts tells a different story, however, despite Bank of England governor Mark Carney saying that lenders had “no excuse” not to pass...
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Can I Get a Mortgage with My Credit Rating?

Having a bad credit rating is often the source of further financial problems. You have limited financing options when your credit history is less than spotless. You also have to deal with higher interest rates and other premiums due to your increased risk factor. One of the most commonly asked questions is whether it is still possible to take out a mortgage loan with bad credit. We’re going to find out the answer right here in this article. Ways to Boost Your Credit Score Before you start searching for mortgage loans, it is actually worth it to take the time and look into your credit history. Instead of accepting the bad credit rating outright, you can take active steps towards improving your credit score. Boosting your credit score is not as difficult – or as time-consuming – as you may think. For starters, you can simply remove incorrect entries from...
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Buy to Let Tax Changes Summary

  The Telegraph have produced a useful summary which gives details of the buy to let tax changes and mortgage interest relief.     
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Rent Hikes Loom!

  It's been reported this week that a million landlords will raise rents in order to beat the government's tax crackdown next year.  From April 2016 the buy-to-let investors will see the tax relief on their mortgage interest cut from a maximum 45 per cent to just 20 per cent.  Over the next 5 years the tax changes will be implemented and will make properties less profitable for those investors with a mortgage. Research has found that more than a million landlords plan to raise their rents next year. Around two thirds of the landlords who took part in the survey said they are going to increase rents next year.  David Smith, of the RLA, says: 'We warned the Government this would happen if it cut interest rate tax relief.' Last week in a case led by Cherie Blair, CBE the Administrative Court refused permission to proceed with a full...
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