A review of Folk2Folk the P2P mortgage lender

Last post: Jun 20, 2013

A review of Folk2Folk the P2P mortgage lender

Folk2Folk was launched earlier this year by a firm of solicitors in Launceston, Cornwall by the name of Parnalls who have been involved in private mortgages going back to the 1930s. In simple terms, peer-to-peer lending brings together borrowers and lenders and Folk2Folk administer this process. Hopefully, you as a borrower will find the following Folk2Folk review informative. 

Who do Folk2Folk provide finance to? Loans can be made available to individuals, partnerships, LLPs, limited companies, sole traders and personal pension funds based in the United Kingdom (excluding the Channel Islands and the Isle of Man) however they will require a first legal mortgage over a property that cannot be the main residence of the borrower and must have a postcode in Cornwall or West Devon excluding Barnstaple, Bideford, Plymouth and Saltash. 

How much can you apply to borrow? Interest only loans are available for in excess of £25,000 on a secured basis subject to a maximum advance not exceeding 60% of the value of the security offered. The lender will The term of the loan can be for a fixed period of up to 5 years, on a 3 months notice basis or with a pre-auction letter of credit/offer. 

What can the loan be used for?  Typically, lending is for self-build building plots, development properties, buy to lets, shops with flats, shops, industrial units, farmland, farms, second homes and holiday lets.   

What are the interest rates and charges?  The interest rate is subject to agreement with the lender but is currently around 7-8% per annum fixed and interest is paid monthly. Folk2Folk will make a charge of between 2% to 2.5% upon completion of the loan or a cancellation fee of ½% will be payable should the mortgage offer be accepted but not proceed to completion through no fault of the lender or Folk2Folk. A scale fee is payable in respect of Parnalls perfecting the security. 

What is the procedure to get a loan? The borrower must pass an initial "Traffic Light System" assessment process by Folk2Folk to have their loan application accepted onto the website of Folk2Folk and the lender may then wish to carry out further due diligence. The amount of loan you are seeking could be provided by one or more lenders at a pre-agreed fixed rate of interest. The loan monies can often be made available within 8 to 10 days of your details being made available on the website. In summary, due to the geographical restrictions this is a very niche offering but it is nevertheless another fine example of how peer-to-peer lending is reaching many sectors of the market and meeting demand for finance where the banks are not. If you think your business or project may benefit from peer-to-peer finance and you want to discuss your options then the team at Choice Loans is well versed in a variety of lending options (conventional, peer-to-peer and alternative) and would be happy to assist. Please either call us on 0845 1260350 or complete our short Commercial loan enquiry form.