After last week’s announcement of Google and Lending Club joining hands for a new venture, here comes another milestone for p2p lending. Meet “Lend to Let” by UK’s Assetz Capital, a recent addition to the P2P lending avenues.
“Assetz Capital “Lend to Let” scheme is based on a Buy to Let Mortgage. Instead of carrying the risk of owning a property you can now still invest in one through “Lend to Let”. Buy to Let mortgages are loans made to individuals or businesses to purchase property which is then rented to a third party. They are typically 5 years in term and are Fixed Rate auctions. Security is taken in all cases in the form of a first charge over the property and the rental income stream. Security is specific to each loan and details are provided in the auction information. Loan to value ratios for these loans are just 50% meaning the property is worth twice as much as the loan. Whilst the loan is for 5 years, lenders can exit at any time via the Aftermarket, which will be live in April 2013.
For example a £100,000 property purchase would require a £50,000 cash deposit from the purchaser and a £50,000 mortgage. The rental income will be paid to an account held by Assetz Capital to ensure the interest is paid monthly to the lenders. A first legal charge over the property is taken on behalf of the lenders, preventing its sale and providing very safe security in the event of a default. Interest is normally charged on a monthly interest only basis. The capital is returned at the end of the loan term by way of property sale or remortgaging.”
Will this p2p alternative hit US shores? Perhaps, the question is “When will this hit the US shores?”
Weekly Lending Club stats:
2758.63 2823.48 (+60 deposit)
Notes Issued & Current:
Full Paid: 17
Late 16 – 30 Days: 1
Late 31 – 120 Days: 0
Charged Off: 0
Expected Monthly Payments (Principal + Interest):
Important Note: I’m not a financial adviser. Consult your own financial adviser before making any investment decisions.