A husband and wife contacted us for help in securing a buy to let mortgage to purchase a 2-bed flat in a popular, Essex commuter town. They were looking for a 5-year fixed rate available to landlords purchasing via a limited company and they wanted to borrow up to 70% loan to value.
The couple are classed as Portfolio Landlords because they own eight mortgaged buy to let properties. This means that lenders are obliged to apply a specialist underwriting approach to make extra certain that borrowing is stressed against both the property in question and the portfolio as a whole. In practice, this means that borrowers have to provide more detailed information than if they have fewer than four mortgaged buy to lets.
Before we could determine and submit an application to the most appropriate lender, we asked the couple to send us a spreadsheet of their entire buy to let portfolio complete with property addresses, ownership structures, rental income and details of all outstanding borrowing.
We also needed to see their latest 2-3 years' tax returns, proof of identity, recent bank statements, evidence of income and expenditure, portfolio cash flow forecasts and a brief business plan.
Documentation collated, we approached the most appropriate lender for the couple's circumstances. A valuation confirmed that the flat was suitable security for the loan and the underwriting process confirmed that the entire deal stacked up. The couple were surprised to receive a formal mortgage offer quite quickly - they had expected the process to arduous but it wasn't because all their paperwork was in order!
The couple accepted the offer and requested that the deal completes in the New Year as the have a busy Christmas!
Here are are the details:
Property value: £230,000
Loan amount: £160,000
Rate: 3.49% 5 Year Fixed
RTI: 125% @ 3.49%
Term: 20 years interest only
Lender arrangement fee: 2% (£3,300)
Mortgage payment: £474 pcm
Rental income: £1,100 pcm
Gross yield: 5.74% pa
Consultant: Jeni Browne, 01732 471647
19th December 2017