Improved rent cover will allow higher HMO & LTD CO borrowing. 04.01.2010
Author: Steve Olejnik Posted on: 04 January 2010
2010 is off to a positive start with a new Buy to Let 3 year fixed rate product at 6.82% intended to allow landlords to gear up against cashflow on multi let properties or properties held within Ltd Cos. The rent to interest cover will allow 135 x monthly rent to a maximum LTV of 70%.
Traditional bank lending assumes a combination of a high notional Base Rate (and margin) plus a reduction of up to 40% in rent to allow for property maintenance and voids. This tends to severely restrict borrowing capacity on all but the highest yielding properties. But this product works quite simply off 130% rent cover at the fixed rate of 6.82%. The product has a Booking Fee of £699 and a completion fee of 2.5%. It is available to both individual, partnership and Ltd Co borrowers. There is an Early Repayment Charge of 7% in years 1 to 3 and 2% in years 4 and 5.
We know that there will be further product and criteria improvements throughout the early months of the year as lenders absorb the Nationwide’s data on house prices recovering by 5.9% in 2009 after the sharp fall of 15.9% in 2008. We will issue product alerts as we identify attractive new products and our Consultants look forward to taking your enquiries on 0845 3456788.
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