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Post by df on Jan 22, 2019 14:47:07 GMT
thanks for the above reply which is very clear - can I ask if the underwriter still gets the bonuses with this loan or is it only the retail investors? The deal will be between the underwriter and FS. Given the idea is to completely sell down the loan to retail then I can't imagine bonuses are too relevant and it will all be taken care of in the fee - but that is just me guessing. On another note, having loans underwritten can be viewed as a benefit. If there is a panel of experienced underwriters then that helps with scrutiny of the loan. I imagine FS would be asked many of the basic questions that have been raised in this thread (ie why does the borrower need the loan) by the underwriter which can flush out many of the problems and improve on presentation on the platform. (I would not be risking £475k on this loan without asking quite a few questions and receiving a satisfactory answer) I haven't underwritten on FS before but have seen loans pulled on other platforms (before hitting the platform) because of issues raised by underwriters. The underwriters can also give valuable feedback on additional information to be included in the loan description which will make the loan easier to understand (as it is in their interest that the loan sells as quickly as possible). It gives more confidence to retail investors if someone is risking half a million. I assume underwriter is much better informed (I wish we had more info on this loan from FS) and also realises they are not likely to offload all of their investment before the loan is due. Perhaps there is a good chance for this loan to be repaid earlier if it's just a matter of couple of months for the mortgage to be approved? With two new 5 figure investments and a few smaller ones the loan is now 18% filled.
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rocky1
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Post by rocky1 on Jan 25, 2019 7:52:24 GMT
Goalposts moving already. Latest update on this loan sounds like underwriter getting nervous hope it's not the landrover people.good luck to everybody in this.
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arby
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Post by arby on Jan 25, 2019 8:24:08 GMT
Goalposts moving already. Latest update on this loan sounds like underwriter getting nervous hope it's not the landrover people.good luck to everybody in this. While it's possible, it's quite a leap to get there. They actually moved the goalposts twice in a day, with the second change undoing the first change. If they actually were worried about the underwriter, the easy solution would be to not close the loan at all and leave it open for funding for ~2 months with the funds have already advanced to the borrower. I'm pretty sure that's what most of us thought was happening anyway.
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dApps
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Post by dApps on Jan 25, 2019 12:54:57 GMT
Goalposts moving already. Latest update on this loan sounds like underwriter getting nervous hope it's not the landrover people.good luck to everybody in this. Whist I don't like this one at all, I think your interpretation of the updates is wide of the mark. The earlier of the two updates: "As the borrower is looking to complete today, this loan will be closed at £200,000 and the balance will be funded by the underwriter." Any indication of the underwriter getting nervous? Second of the updates: "There has been a change of plan with the borrower. They have agreed an extension on completion of 5 further days. This means we will re-open the loan for funding, still being underwritten at the funding stage. <snip>" Any indication of the underwriter getting nervous? I agree the wording on the final (snipped) sentence ("As the loan is funded, the underwriter will be replaced") could perhaps be less clumsily written to " As the level of platform funding increases, the level underwriter funding will decrease." Well, that's my interpretation and I agree with your 'good luck' sentiment. Not least to the underwriter. 
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adrian77
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Post by adrian77 on Jan 25, 2019 13:23:54 GMT
Looks to me as if this borrower is using FS to come up with a lot of money very quickly to complete on this purchase - nothing wrong with that but am I correct in thinking not only has the buyer to pay FS's interest charge but also the underwriter's fee.
Still puzzled by this one - rental seems to be £3K pcm tops which is only (!) £36K pa and won't pay the FS interest charge. However if this family can get a vastly cheaper BLT then I think it could work but it would still be very tight. I would be interested to know more details about the bridging finance. As to the tax situation absolutely no idea!
I spoke to one of the block's estate agents who told me that things were very quiet at the moment whilst this Brexit melarchy is sorted out, so how is this borrower going to repay the interest in 6 months time?
Granted this family may have other funds in the pipeline but if not then yet another interesting one. In fact an interesting one all round...
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cwah
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Post by cwah on Jan 25, 2019 14:27:03 GMT
I still don't understand why this buyer couldn't wait to get the mortgage? It's not like the market is hot now and he'll miss it if he doesn't buy now???
He's not only overpaying but also will pay hefty interest amount on top of that?
Why would anyone do that?
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bg
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Post by bg on Jan 25, 2019 14:32:44 GMT
I still don't understand why this buyer couldn't wait to get the mortgage? It's not like the market is hot now and he'll miss it if he doesn't buy now??? He's not only overpaying but also will pay hefty interest amount on top of that? Why would anyone do that? Because he is buying off plan and has already exchanged contracts. If he doesn't complete the purchase he will forfeit his deposit which is likley in the region of 25% of the purchase price (£200k)
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Doc
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Post by Doc on Jan 25, 2019 15:51:55 GMT
I still don't understand why this buyer couldn't wait to get the mortgage? It's not like the market is hot now and he'll miss it if he doesn't buy now??? He's not only overpaying but also will pay hefty interest amount on top of that? Why would anyone do that? Because he is buying off plan and has already exchanged contracts. If he doesn't complete the purchase he will forfeit his deposit which is likely in the region of 25% of the purchase price (£200k)
Exactly - the sale completion statement listed in the files section shows total deposits of £159k on the £795k purchase price.
The remaining balance due being £636k, this figure is relevant to the current valuation, as the borrower must believe the property to be worth at the very least this amount plus any additional bridging loan costs - otherwise he would simply walk away from the purchase and forfeit his deposit.
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adrian77
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Post by adrian77 on Jan 25, 2019 17:01:36 GMT
given that the FS loan is £517k - I wonder if the difference is the bridging loan viz £119k although there is the stamp duty at I guess 8% to pay. I too am wondering "why" and "why now" - until a few days ago Sterling was very weak but is going up at the moment. As we all know there are a lot of switched on foreign investors buying in London for cash and can afford to leave their properties empty. I can see this one renting for £2K a month for a quick rental income so that is only £24K a year before expenses which according to my maths won't even pay 50% of the stamp duty
I am experienced in buying and negotiating and in this market; I make an offer and refuse to pay anything other than a nominal deposit and if they don't like it I walk away (unlike Teresa May!) so I wonder how experienced this family or their agent are? Or maybe they know exactly what they are doing!
Also I note the developers (big company) have charged ground rent and service charges from the date of exchange - what a miserable bunch - hope they go bust!
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benaj
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Post by benaj on Jan 25, 2019 17:41:04 GMT
This is my two cents.
Leasehold can be sold. There are too many overseas owners in these properties, chasing ground rent and management fee are pain. Some leaseholders sold them off to a third party and raise the ground rent with the solicitor fees plus admin fees.
This borrower does not have to paid stamp duty, offer by the developer.
If the borrower manages to get a BTL mortgage after this completion, a monthly rent of 1500 would probably good enough for this FS refinance and first 2 years. I can’t see why the borrower does not want to refinance this asap.
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bg
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Post by bg on Jan 25, 2019 17:44:28 GMT
given that the FS loan is £517k - I wonder if the difference is the bridging loan viz £119k although there is the stamp duty at I guess 8% to pay. I too am wondering "why" and "why now" - until a few days ago Sterling was very weak but is going up at the moment. As we all know there are a lot of switched on foreign investors buying in London for cash and can afford to leave their properties empty. I can see this one renting for £2K a month for a quick rental income so that is only £24K a year before expenses which according to my maths won't even pay 50% of the stamp duty I am experienced in buying and negotiating and in this market; I make an offer and refuse to pay anything other than a nominal deposit and if they don't like it I walk away (unlike Teresa May!) so I wonder how experienced this family or their agent are? Or maybe they know exactly what they are doing! Also I note the developers (big company) have charged ground rent and service charges from the date of exchange - what a miserable bunch - hope they go bust! This really is one of the simplest loans on FS.....I really struggle to see where all this confusion comes from. This is a new build home. It was bought off plan in August 2017, it is not a decision taken "now". If you are experienced in buying in this market you should know how the process works. You negotiate the price (which in London is pretty much always just the list price) and then pay the deposit on exchange 4-5 weeks later. In this instance the initial deposit was 10% with a second tranche of 10% due at a certain stage of the build. There is no room for negotiation on this, you can't refuse to pay a deposit. When the flat is completed, the developer gives you notice to complete. You then have (typically) 2 weeks to complete otherwise you start racking up very expensive interest charges and fees. Ultimately if you do not pay you will forfeit your deposit and lose the flat. The developer has not charged ground rent and service charges from the date of exchange (which was in 2017) but from the date when they were due to complete to the end of the year. It's standard practice. What has happened is the buyer has not been able to get a mortgage in time and needs a bridge loan to complete on the deal. The bridging loan is the FS loan. Oh, finally stamp duty is not 8% on this transaction. If it is a second home it will be 6.7%. If it's a first time purchase (or bought through a company) it's 3.7%.
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SteveT
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Post by SteveT on Jan 25, 2019 18:34:29 GMT
This really is one of the simplest loans on FS.....I really struggle to see where all this confusion comes from. But which powerboat is it connected with? 😉
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arby
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Post by arby on Jan 25, 2019 19:00:59 GMT
This really is one of the simplest loans on FS.....I really struggle to see where all this confusion comes from. But which powerboat is it connected with? 😉 The one that competes in the Premier league.
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cwah
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Post by cwah on Jan 25, 2019 21:20:29 GMT
given that the FS loan is £517k - I wonder if the difference is the bridging loan viz £119k although there is the stamp duty at I guess 8% to pay. I too am wondering "why" and "why now" - until a few days ago Sterling was very weak but is going up at the moment. As we all know there are a lot of switched on foreign investors buying in London for cash and can afford to leave their properties empty. I can see this one renting for £2K a month for a quick rental income so that is only £24K a year before expenses which according to my maths won't even pay 50% of the stamp duty I am experienced in buying and negotiating and in this market; I make an offer and refuse to pay anything other than a nominal deposit and if they don't like it I walk away (unlike Teresa May!) so I wonder how experienced this family or their agent are? Or maybe they know exactly what they are doing! Also I note the developers (big company) have charged ground rent and service charges from the date of exchange - what a miserable bunch - hope they go bust! This really is one of the simplest loans on FS.....I really struggle to see where all this confusion comes from. This is a new build home. It was bought off plan in August 2017, it is not a decision taken "now". If you are experienced in buying in this market you should know how the process works. You negotiate the price (which in London is pretty much always just the list price) and then pay the deposit on exchange 4-5 weeks later. In this instance the initial deposit was 10% with a second tranche of 10% due at a certain stage of the build. There is no room for negotiation on this, you can't refuse to pay a deposit. When the flat is completed, the developer gives you notice to complete. You then have (typically) 2 weeks to complete otherwise you start racking up very expensive interest charges and fees. Ultimately if you do not pay you will forfeit your deposit and lose the flat. The developer has not charged ground rent and service charges from the date of exchange (which was in 2017) but from the date when they were due to complete to the end of the year. It's standard practice. What has happened is the buyer has not been able to get a mortgage in time and needs a bridge loan to complete on the deal. The bridging loan is the FS loan. Oh, finally stamp duty is not 8% on this transaction. If it is a second home it will be 6.7%. If it's a first time purchase (or bought through a company) it's 3.7%. Thanks very informative. Where did you see he bought it off plan in aug 2017? And the biggest one, why would it sell flash for £625-£650k? When looking in rightmove a 1/4 miles away from this flat, i see load of comparable around £600k. Few examples: Better location and only few floors at £580k asking: www.rightmove.co.uk/s6p/65836417This one equivalent size with balcony at £620k: www.rightmove.co.uk/s6p/59546736Or even this 4 bed flat at £650k: www.rightmove.co.uk/s6p/73009484Bear in mind in the current market these won't sell for asking price and chance are they may sell below £600k. So why would this flat sell quickly around £625-650k if equivalent don't? In my opinion I feel on a flash sale it may sell around £550k or less. Leaving a haircut due to admin & solicitor fees. And underwriter fee probably has priority over regular investors as well!
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Post by mrclondon on Jan 25, 2019 21:57:23 GMT
Where did you see he bought it off plan in aug 2017? See pages 9, 18 and 29 of the VR.
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