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FAQs

It’s our ethos to be completely transparent, and we’ve tried to cover most of the questions we get asked, but if you have a question that isn’t answered here, give us a call and we’ll be glad to help you.

FAQs

It’s our ethos to be completely transparent, and we’ve tried to cover most of the questions we get asked, but if you have a question that isn’t answered here, give us a call and we’ll be glad to help you.

Construction Insurance FAQs:

1. How do we make our money?

We receive commission from the warranty provider on each transaction that completes successfully.

2. What is a structural warranty?

If you are selling a new, or newly converted home that is less than 10 years old, lenders will require the seller to have in place a structural warranty. These warranties are usually arranged prior to building work commencing, but sometimes are overlooked and are then required to be purchased retrospectively.

When acting for a purchaser, a solicitor or conveyancer will request sight of a warranty certificate, prior to exchange of contracts. The requirement to provide insurance protection on new and newly converted home is detailed in the UK Finance (CML) lenders handbook.

3. What does a structural warranty cover?

The structural warranty typically covers the following areas:
  • Foundations
  • Load-bearing retaining walls
  • Roof covering
  • Floor decking and screeds, where they fail to support normal loads
  • Wet applied plaster
  • Double or triple glazed panes to external windows and doors
  • Underground drainage that the policy holder is responsible for maintaining.
  • Cover is in relation to a defect in the design, materials, workmanship or components

4. When does cover commence?

This can vary with different providers and may commence from when the property has had a final building control inspection, or a final warranty inspection, or from the date of legal completion when the first homeowner moves in. It’s important to check the specific policy wording to clarify this.
Providers may offer cover to protect purchaser’s deposits prior to completion, should the builder or contractor become insolvent and not finish the development. This protection is either built in to the warranty cover as standard, or often available as an additional option.

5. How much does a warranty cost?

Different providers will rate their insurance product based on different parameters. Often the provider will need to know either the rebuilding cost, or the anticipated sales values of the homes that require cover. Other factors may influence the price, including the number of years relevant experience the builder or contractor has, as well as the type of materials being used, for example traditional materials and a standard design Vs non-standard materials and an innovative design.

If the warranty is being purchased retrospectively, then it is likely that it will be more expensive, and some warranty providers will even decline to provide cover. This is because providers usually undertake key stage inspections throughout the build as part of their own risk management. Any issues during the course of construction can be highlighted, which also helps the builder, or contractor. If the warranty provider is unable to undertake these inspections it increases their risk exposure.

6. How can i trust the prices you show?

Compariqo researches the market based on your specific needs and presents back a range of options directly from different providers, saving you time and money.

7. What is a Guide Price or NBI?

A guide price or NBI (non-binding indication) is an indication of costs based on some basic information being presented to a warranty provider. Once further information is provided a formal ‘binding’ quote is provided. Compariqo will assist you with this every step of the way.

8. Are structural warranties on new homes transferrable?

Yes. The cover is on the property. Cover will continue on the property for a ten-year period, irrespective of ownership, or subsequent purchasers.

9. Do all lenders approve all warranty providers?

No. Mortgage lenders will approve specific ‘named’ warranty providers. If you are a developer selling a new development, it’s important to check whether a warranty provider has a high number of lender approvals, otherwise you may find the home(s) you’re building are difficult to sell, as lenders will not release funds if they do not approve the warranty provider.

10. Are all warranty providers the same?

No. The structural warranty market has broadened a lot, particularly over the last 10 years. This provides greater choice not just on price, but importantly on the cover available based on different types of developments. Compariqo provides a transparent unbiased view of the market so you’re better informed on the options available to you.

11. Does builder / developer experience matter?

Mostly…yes. One of the rating factors that can affect the cost of the warranty and insurance cover is the number of years’ experience a builder, or developer has. Scales vary with different providers 1 to 8 years, 1 to 15 years, or even up to 20 years, or more. The more years’ experience a builder, or developer has – the less the warranty cost, but this isn’t’ relevant to all warranty providers. We can help guide you through this requirement presenting you with a range of options.

12. Do I need to register with a specific warranty provider?

As part of their terms and conditions, some providers will incorporate a registration, or membership fee into the initial cost of the warranty and insurance cover. This is usually an annual membership renewed each year. As part of an annual membership, providers will often receive additional benefits, including discounts on other products and training. Not all providers insist on this type of fee.

Development Finance FAQs:

1. What is development finance used for?

Development finance is a type of loan which can be used to make major changes to a property, or develop a new site from scratch.

2. What areas do you cover?

We cater for projects across the whole of England, Wales, Scotland & parts of Northern Ireland.

3. How much can I borrow?

  • Our development loans range from £50k to £100m
  • We can fund up to 75% of the Gross Development Value, and up to 90% of the overall development costs

4. Will I have to pay additional fees if I complete my project early?

Should you complete your project ahead of schedule, there are no penalties for paying back the Development Loan early. You will only be charged interest on the length of time the money was borrowed for.

5. What if I don’t use all of funds from the loan facility?

Interest is charged only on the funds drawn down from the loan facility. Any funds that have not been utilised will not incur any interest.

6. Can I still get finance with a poor credit history?

Yes, funding is secured against the site value, so even if you don’t have the strongest credit history we can still help you.

7. Will I have to make monthly payments?

You will have the choice of either servicing the interest on a monthly basis, or have the interest “rolled-up” into the loan facility. If you opt for rolled-up interest, there will be no monthly payments applicable, instead all interest and fees are added to the loan amount and payable upon completion of the project.

8. Do you only provide loans for certain types of properties?

No, we can provide finance for almost any type of property-related asset, including but not limited to:

  • Land with or without planning permission
  • Residential properties
  • Semi-commercial properties
  • Commercial properties & Office spaces
  • Leisure Centres
  • Golf Courses
  • Pubs/Restaurants
  • Hotels
  • Places of worship
  • Industrial units

9. What additional documentation would I need to provide?

A feasibility study of your development would be required.

10. Can I refinance my development under a Commercial or Buy-To-Let Mortgage?

Yes! Once the project has reached practical completion, we can assist with refinancing the project under a Buy-To-Let Mortgage or Term Loan, allowing you to retain the property you’ve built as part of your portfolio.

11. Do I need a solicitor?

Not at all! Many of our lenders offer “dual representation”, meaning the lender will appoint a solicitor to act on behalf of both themselves, and you as the client. Opting for dual representation can also help to speed up the application process!

12. What are drawdowns?

These are staged payments made against works carried out on the property.

13. What are the usual drawdown stages in a project?

Drawdowns can vary from project to project but are usually released as follows:

  • Land value – an initial draw down against either the purchase cost or the value of the land (if already owned).
  • Initial costs including the footings and foundations.
  • Wall plate which is the basic external structure of the project.
  • Wind and water tight which primarily means the windows and the roof.
  • 1st fix which includes the plastering and the initial installation of the electrics.
  • 2nd fix to complete the electrics and any finishing work required such as painting and decorating, landscaping etc.

 

Bridging Finance FAQs:

1. What is a bridging loan?

A bridging loan is a type of short-term finance, typically taken out for a period of 1 month to 3 years, depending on your requirements.

2. Who uses bridging loan?

Bridging loans can be useful to a variety of different people for a number of different reasons, and come with an array of benefits:

  • The applicant is beyond the age limit for a traditional mortgage
  • The applicant may be asset rich but cash poor
    e. not enough income proof to pass the required affordability calculations needed to obtain a mortgage
  • The applicant may have poor credit
  • The property may be classed as “not standard security” for a mortgage
    e. the property could be without a kitchen/bathroom or in need of modernisation, making it uninhabitable
  • The seller may only accept offers from buyers who are chain-free, such as cash buyers or buyers with bridging finance
  • The funds may be needed as a matter of urgency
  • The funds may be needed for a specific requirement, not deemed acceptable to traditional mortgage lenders
  • The funds may be for a short-term requirement where the applicant doesn’t want to be tied in for a fixed commitment period
  • The borrower wants minimal hassle

3. Who would qualify for a bridging loan?

  • Clients who can or cannot prove income
  • Clients with an excellent or impaired credit rating
  • Clients who are employed, self-employed or unemployed
  • Companies or individuals
  • Anyone with equity in their property or an available cash deposit

4. How much can I borrow?

  • Our bridging loans range from £26k to £100m
  • We can fund up to 80% of the current value of the property

5. Can I still get finance with a poor credit history?

Yes, funding is secured against the site/property value, so even if you don’t have the strongest credit history, we can still help you.

6. Will I have to make monthly payments?

You will have the choice of either servicing the interest on a monthly basis, or have the interest “rolled-up” into the loan facility. If you opt for rolled-up interest, there will be no monthly payment applicable; instead all interest and fees are added to the loan amount and payable upon completion of the project.

 

7. Do you only provide loans for certain types of properties?

No, we can provide finance for almost any type of property-related asset, including but not limited to:

  • Land with or without planning permission
  • Residential properties
  • Semi-commercial properties
  • Commercial properties & Office spaces
  • Leisure Centres
  • Golf Courses
  • Pubs/Restaurants
  • Hotels
  • Places of worship
  • Industrial units

 

8. How quickly can a loan be secured?

Provided we have all the information and documentation we need, loans can be secured, from application to drawdown, in as quickly as 10 days!

Buy-To-Let & Commercial

Investment Mortgages FAQs:

1. How much can I borrow?

  • Our Buy-To-Let Mortgages range from £50k to £3m+

We can fund up to 80% of the current value of the property

  • Our Commercial Investment Mortgages range from £100k to £50m+

We can fund up to 75% of the current value of the property

2. What proof of income is required?

  • Last 3 months of Payslips (if employed)
  • Last 2 years of SA302s & Tax Year Overviews (if self-employed)

3. Is there a minimum income required?

We offer Buy-To-Let Mortgages with no minimum income required. As long as you submit a Tax Return each year or receive a payslip for your income, no matter how much it may be, you will still be eligible!

4. What other documents do I need provide?

– Certified copy of Proof of Address (dated within the last 3 months)

  • Proof of Address can be any of the following:
    • Bank Statement
    • Utility Bill
    • Current Driver’s License
    • P45/P60 Tax Coding Letter
    • Tenancy Agreement

– Certifies copy of ID

  • ID can be any of the following:
    • Passport
    • UK Driver’s License
    • UK Firearms Certificate

– Property Portfolio containing all additional Buy-To-Let properties owned

 

– Last 3 months of Bank Statements

5. What is a “Certified copy” of a document?

A certified copy is a clear photocopy of the original document which should be: signed, dated and “certified” with the wording ‘Certified as a true copy of the original’by a professional.

  • The certifier should print their full name and occupation on the document. The list opposite are some of the acceptable professions.
  • Documents can also be certified at the Post Office using their Document Certification Service, however they will charge a fee for this. 

6. Who can certify documents?

  • Accountant
  • Bank/Building Society official
  • Barrister
  • Chairman/Director of a Limited Company (registered at Companies House)
  • Commissioner of oaths
  • Dentist
  • Doctor
  • Teacher/Lecturer
  • Financial services intermediary
    e.g. IFA Registered stockbroker or insurance broker
  • Justice of the Peace
  • Member, associate or fellow of a professional body
  • Member of Parliament
  • Notary Public
  • Nurse (RGN or RMN)
  • Optician
  • Person with honours (e.g. an OBE or MBE)
  • Pharmacist
  • Police officer
  • Post Office official
  • Solicitor

7. I’ve never purchased a Buy-To-Let property before, can you still help?

Yes! We work with a broad range of clients, from the most highly experienced property portfolio owners, to those looking to make their first Buy-To-Let investment. 

8. What properties can I get a Buy-To-Let on?

  • Detached, semi-detached or terraced houses
  • Leasehold Flats
  • HMOs (Houses of Multiple Occupancy)
  • MUFBs (Multi-unit Freehold Blocks – up to 1,500 units)
  • Offices, warehouses, pubs, leisure centres or other commercial spaces
    • We cannot assist with any gambling-related premises (e.g. Betting Shops & Casinos)

9. Do you offer Buy-To-Let Mortgages for Ex-pats?

Absolutely! Whether you are a UK Resident, Ex-pat, Foreign National or Non-domicile, we have a Buy-To-Let product suitable for you.

10. Is there a maximum number of Buy-To-Let properties I can have?

Not at all! There is no limit on the number of properties you can have in your Buy-To-Let portfolio. We work with a diverse network of lenders, helping to finance anything from a single-unit purchase to a portfolio refinance of up to 1,500 units!

11. Is there a limit on the number of properties I can have with the same postcode (e.g. row of houses/block of flats)?

Not at all! Unlike many other providers, we work with lenders that have no restriction on the number of properties you can refinance within a single postcode.

12. What are the age restrictions for a Buy-To-Let Mortgage?

  • Minimum age of 25 years old for first-time landlords, and 21 years old for existing landlords
  • The maximum age is 85 years old at the end of the mortgage term.

13. Can I get a Buy-To-Let Mortgage in my Limited Company name?

Yes, we welcome applications on behalf of Limited Companies. We will always request a personal guarantee from the Directors and complete our full due diligence investigations on all Directors and Shareholders with shareholdings greater than 25%. 

14. Can I make overpayments?

Overpayments of up to 10% of the outstanding balance can be made each year. 

We research the market, so you don’t have to

We research the market, so you don’t have to