Purchase Options.

Cash Purchase

Mortgage purchase with 20% deposit

Castle can assist with investors choosing either purchase method.

The cash purchase or “gearing” method simply comprises of purchasing a property with cleared cash funds. Upon completion of the sale the refurbishment begins. Upon completion of the refurbishment the property is re-mortgaged releasing funds to allow another property to be purchased.

This process can usually be repeated 4 to 5 times a year

Example of a cash purchase:

12 Acacia Avenue , Anytown
Independent surveyor’s value after refurbishment.	£50,000
Investor’s purchase price via Castle	£42,000
(including ALL refurbishment costs)
Re-mortgaged at 85% LTV releasing	£42,000

These funds are released and used to purchase another property and so on…………

When a client is buying a property using a mortgage facility they can borrow 80% of the property’s current value, in its un-refurbished condition. The client can then release further funds once refurbishment is completed.

Example of a purchase using an 80% LTV mortgage.

Acacia Ave. Anytown.
Current value (un-refurbished)	£40,000
Value after refurbishment	£50,000
Investors purchase price via Castle	£45,000
(including ALL refurbishment costs)
Investor borrows 80% of	£40,000/£32,000
Amount of funds required to make up to the Purchase price	£13,000

After the refurbishment is completed the client has the property re valued.

For example: Property is re-valued at £50,000 after refurbishment

The investor can release 80% of the £10,000 equity

This releases £8000!

Therefore the purchase has only cost the investor £5,000 (plus professional fees)

We have secured lending facilities with major, high street financial institutions who provide funding for both methods and the process is very swift.