Capital raising for landlord with low income

Our client, a director of his own company, was keen to expand his buy to let portfolio but needed to refinance his only rental property in order to do so.

The property in question was an unencumbered, 2-bed mid-terrace house in Manchester. In good condition, the house was already to let to tenants for £595 pcm.

Although the client is a director of his own business, he has a relatively small declared taxable income, so we needed to find a lender that doesn’t have any minimum income restrictions (most lenders insist upon a minimum of £25k pa in addition to the rent). The client was also keen not to pay excessive fees.

Fortunately, we have access to a lender who doesn’t impose any minimum income restrictions and accepts part-time landlords, as long as they can prove they have held one buy to let property for more than six months. This lender was also offering mortgages with lower than average arrangement fees – current average is £1,346.

The remortgage went through without a hitch. Using the funds raised as deposits, we then helped the client finance his next two buy to let purchases.

Here are the details of the deal:

Property price: £150,000

Loan amount: £112,000

Loan to value: 75%

Rate: 4.09% 2 year fixed

Term: 18 years interest only

Monthly payment: £382

Month rental income: £595

Annual yield: 4.8%

Lender arrangement fee: £995

This is just one example of how I've helped a client secure a buy to let mortgage. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.

4th January 2015