Bol*** R*** BL5

The 4 is very near the 7 on a keyboard.... 
I have seen this before, perhaps needless to say I didn't get an answer. The updates are showing on auto invest so i guess the rest went through there and just £71k in select.
I used to work for a company that had a staff sales facility, every time we missed a "pay by" date we had a black mark put on our Experian credit rating. I say this because no one seems to care about paying these loans on time anymore. Kuflink won't notify Experian because this guy will never get a cheap remortgage deal then. The loan is "performing". I don't get it. You miss the deadline, you are in default! In this case, you miss the deadline, Kuflink get default interest, but it is not a default. Simples! 

Do they pro rata the other values? Security value for instance?

Hi, the story on this one probably lies in why he needed the loan from Kuflink in the first place. I can't really come up with a scenario whereby i buy a property for long term letting and get a 12 month loan from  company like Kuflink (no disrespect meant on this occasion) with a view to refinancing in 12 months. If he bought it at auction maybe you have to use this sort of loan, but why 12 months, why not 6? He has a tenant. He has not applied for planning. Nothing has added value in 12 months.
Anyone got any clues as to why people do this?

scooter not 100% sure I follow, but 1 profitable scenario would be if you were up to no good, perhaps didn't really own the property & planned to scarper with the money. I'm sure there is a better one.

A common business model is to buy a property, then add value to it, by extending or reworking plans etc, then refinancing onto a B2L mortgage before letting it out. The idea behind it is that by adding value and refinancing you can then take all your money out of the deal to be used on the next one.



For example (these numbers are not realistic and just to help explain) , you buy a place for £100k with a £25k deposit (for B2L you need minimum 25%). You then add £100k of value and the property is then worth £200k. You can refinance onto a £150k mortgage, which means you are able to get all your initial deposit back and, in this example, another £50k.



It used to be very possible but nowadays it is hard to get all your money back but getting most of it back can still be very helpful in financing the next deal. The catch is that you cant refinance to another mortgage within 6 month and therefore having a 12 month safety net makes far more sense although it does cost more. It is far cheaper than a 6-month bridging loan and then 6 months of late fees and penalty interest.

I’ve done similar in the past (pre-Covid) using bridging finance from Precise and Together, they were both on 12 month terms using no exit fees products and I exited the loans early in 4 months on one and 10 months on the other. Both were relatively straightforward refurbs on properties that wouldn’t be mortgageable straight away but only needed non structural work to make good into a habitable and mortgageable state.

And while it is true that a lot of BTL lenders will not countenance a remortgage within 6 months of purchase (or will not revalue the property upwards within that time), there are lenders that will.

In this case it looks like the borrower couldn’t get the valuation/LTV/amount needed from more mainstream bridging providers and hence had to come to Kuflink.