The Market Financial Solutions FAQs – Answering Your Questions

We’ve been making more efforts to reach out and communicate with our brokers and borrowers here at Market Financial Solutions. In recent months, we’ve put more emphasis on working with those who have turned to our educational resources for help with their plans. Whether that involves our guides, reports, or blogs.

We love the conversations that stem from this. We get to know our clients better, understand what’s on their mind in the current market, and discover new ways of servicing the industry’s needs.

In the process of doing so, we’ve noticed a few common questions emerge from the enquirers we’ve spoken to. As such, we thought we’d set the record straight in a single, easy to find location. We hope our answers here provide our clients with the clarity they need but if there are still looming questions, our phone lines are always open.

On to the questions…

What is the difference between regulated and unregulated lenders?

Simply put, when it comes to lenders, those who are regulated are overseen by the Financial Conduct Authority (FCA). Unregulated lenders, such as Market Financial Solutions, are not, although they must still register with the FCA and adhere to certain Anti-Money Laundry and Financial Crime prevention rules.

This ultimately boils down to the type of products on offer for the underlying lender. Regulated loans allow borrowers to live in the property they’re using the capital for. Unregulated loans are solely used for investment purposes, the borrower cannot live in the property they’re investing in. they tend to be favoured by intermediaries, property investors, developers, and landlords.

The only exception to this is here we lend a 2^nd charge loan for investment purposes. Here, a borrower may be able to live in the underlying property. There is of course more nuance here and so to really get to grips with our products, our underwriters should be contacted.

Do you lend on the projected value of the property?

No, we will not lend on the projected value of a property, we will only lend on the current value of the property. We can incorporate the expected value of a property after a refurbishment or renovation within the underwriting process but ultimately, the funding we deliver will be based on the property’s current value.

How much of my loan can I use for refurbishment?

Essentially, 100% of a Market Financial Solutions bridging loan can be used for a refurbishment. In fact, our Permitted & Light Development Bridging Loans have been designed from the ground up to solely cover refurbishment, renovation, and/or conversion projects.

What’s important to remember with these loans, is that they will be based on the strength of the investment case, alongside an exit strategy. We will need to know how a refurbishment loan would be redeemed, which could be via refinancing, an asset sale, etc.

Specifically, for a refurbishment plan, we would also need to see that a detailed schedule of works has been created, alongside a builders quote We need to be comfortable that the borrower has sufficient time to do the works and exit our loan during the term, which will be a key focus during the underwriting process.

Are HMOs a good investment idea?

This, we cannot answer. We are not financial advisors, and we cannot guide our borrowers on how they should invest.

Generally, HMOs may offer higher yields for landlords when compared to standard BTL properties. But, they also typically come with added complexity and legislative challenges.

As with any property investment, the success will depend on the borrower’s circumstances, demand in the market, and other factors.  Should our borrowers want advice on what their best options may be, they should seek guidance from qualified professionals.

We hope these answers help our brokers and borrowers gain clarity on how Market Financial Solutions works, and how we may aid their investment journeys. We will continue to answer any questions put to us.