Howard Reuben Cert CII (MP) CeRER

Hello Grahame

I am a mortgage broker (31 years experience) and I can categorically state that every lender has always had the right (within their commercial lending policies, criteria and terms) to review their mortgage book, to assess current LTV's, to do interim credit checks, to check on who the occupants are, and a myriad of other commercial due diligence processes too.

To alleviate your stress though, even if they are asking for valuations, as long as your LTV is within the agreed lending limits, then there should be no concerns anyway.

If you have fallen in to a higher LTV bracket (maybe due to reducing house prices), and if you have other properties / equity (or cash), they may ask you to utilise these other resources simply to rebalance your portfolio.
.
For future mortgage strategies, when we are asked about repayment versus interest only, we often recommend the 'flexible interest only' approach, where you can overpay (without charge) whilst you have tenants in place and the rent is coming in (ie treating the mortgage as though it's a repayment basis loan), and when you need to reduce the payments (or want to), simply reduce it down to the contracted interest only level. Not all lenders allow this, but we know the lenders who say yes.

Hope this helps re current stress and also for forward planning.... Read More

Hello Lee
I am a mortgage broker and have arranged many part portfolio remortgages of MX, Rosinca, Siberite, Topaz etc accounts, and for every case we have never experienced the lender asking for any consolidation, crystallisation or equity retention.
Maybe it's just the way we package it? 😁
We would be happy to offer our help for you as well.... Read More

James, there are numerous lenders that we work with who will not be so bothered about 'minimum' personal income details from you, but there are still always the AML due diligence checks, credit risk profiling, assessing experience etc etc.

As long established brokers, and also portfolio landlords, we know the landlord-friendly lenders who are supportive and easier to do deal with.

To check your options, contact me via my profile link anytime.

Howard... Read More

One issue we are finding is that when a BTL mortgage borrower needs to renew a special deal which is expiring (ie coming to the end of a 2yr or maybe 5 yr fixed rate deal), that they cannot remortgage (even for the same amount) due to the new higher stress tests (125%, 140%, 145% etc) that lenders impose as their affordability criteria.

We do have a few solutions though, where lenders will allow a £ for £ remortgage based on a 100% rent to mortgage payment ratio.

Also we can negotiate product transfer deals too.

Rather than jumping from, say, 3.75% to an SVR of 9% (or higher with many lenders), my team of expert BTL mortgage brokers is here to discuss your situation and show you what eligible options you may have.... Read More

EPC's A - E are still mortgageable 😁... Read More

Hello Freya

That article is 10 years old (published 26th July 2013).

The market has massively changed since then.

There may be some funding options, but they will be 'client-specific' and based on your property ownership status, portfolio size, credit and income data, etc.

For a confidential chat, please send me a message via my profile link and we would be pleased to offer our advice.... Read More

As a mortgage broker, I come across this situation on a regular basis.

Some people do genuinely forget, but most people who I have interviewed have chosen to hide this information from the lender because 'my residential rate is cheaper than a BTL rate'.

Either way, this is a fundamental breach of the residential mortgage Offer terms and conditions.

We can help, either with your current lender or if more appropriate with a new lender instead.... Read More

"Are Grade 2 listed properties completely exempt" ... for mortgages, yes.

I bought a G2 listed 1640 part thatched cottage this year, as a holiday let, and my lender did not require an EPC for it because of it's Grade II listed status.

All you need is a good Broker :-)... Read More

Hello Binks

Re "I do recall, from the previous round of mortgaging, that lenders had a maximum number of properties they were willing to lend on within a block or street or postcode (i.e. it was their exposure as lender they were limiting)"

..... you are correct and we know the lenders who will still allow this within their criteria.

If you have your flats all on leasehold arrangements then you are of course now formally known as a 'portfolio landlord' ,and not all high street banks now lend to portfolio landlords (ie 4 or more BTL mortgaged properties), however there are still many that do.

There are also specialist lenders and broker only lenders that we can provide you with access to.

For a personalised mortgage service, from specialist BTL mortgage brokers, contact me via my profile link enquiry form and me and my Team would be pleased to help.

Howard... Read More

Santander's post budget announcement;

"Help to Buy: mortgage guarantee scheme

A new Help to Buy: mortgage guarantee scheme, supported by the government, is starting in April. We’re pleased to support this and are working to launch these products in line with the government timescales.

We intend to offer 95% LTV products to intermediaries. We’ll confirm our launch date over the coming weeks along with more detail on the scheme rules and policy, including eligibility and any additional requirements for borrowers".

So, don't expect immediate 95% LTV products, do expect them to be on a repayment basis only, also strict affordability rules and .. possibly quite high % rates too.

The scheme will be open for new mortgage applications from April 2021 to December 2022, reflecting the government view that the current scarcity of high loan-to-value lending is primarily a response to the pandemic rather than a more structural problem... Read More

Hello Elizabeth

Many of the banks are showing sympathy for businesses and individuals who have been financially affected by the covid-19 pandemic. They are taking a view on a case by case basis and so because of that there are no hard and fast rules between them.

Some lenders will decline, some will accept, some will defer their agreement to lend.

One reason why it comes across as a negative situation is that albeit the loans and grants were being touted by the Government as a 'must have to help you to survive in business' proposition, actually what every single borrower has truly done is to present themselves as financially distressed, unable to fund themselves after just a month or two, and painting a picture that their finances are actually quite fragile with no savings or underpinning financial security to aid them through a short term downturn in business.

That may or may not have been the case for you personally, but that is the image every CBILs and BBL borrower has painted.

With that in mind, any new remortgage or purchase mortgage application is scrutinised individually and extra questions, forms and supporting evidence is required.

This may lead to a perfectly fine decision and 'carry on as usual' mortgage application, or it may not. Either way, you won't know for sure unless you speak with a Broker who can assess your current situation, and source the options you are eligible for.

You can contact me and my Team via my profile link.

Hope this helps.... Read More

100% agree Mick 😁👍

When the pandemic passes and the property and finance world starts to recover some sort of normality, the lenders will not immediately jump back up to high LTV offers, so yes, reduce balances now, refinance all mortgages on to lower rates now, and take this time and use it as an opportunity to focus on the BTL business, before the market restricts further and the recovery takes longer.... Read More

Hello Richard. We work on a specific, personalised and case-by-case basis, so please contact me for advice on which lenders and products you may be eligible for.

There is no one-answer-fits-all in this particular strategy (so many other factors are crucial too, eg portfolio size, experience, assets / liabilities, age, net income, credit status etc), so whereas there may be an agreement to lend by a commercial mortgage lender, or holiday let lender etc, they may say yes to some people and no to others. Same as all mortgage applications of course.

In my experience there is absolutely no benefit to anyone for a list of lenders to be banded about, because the lenders only want to receive properly packaged cases from experienced brokers who carry out a lot of the initial underwriting and due diligence up front for them, and not to be bombarded by tyre-kicking enquiries (which happens a lot) that take up a huge amount of their resources for no return.

Our lender partners would not take kindly to me listing them in this type of 'quirky' discussion.... Read More

"..... recommend ANY mortgage lenders who are happy to lend on R2R properties?" .... simply, no.
Sub letting is a non allowed activity and is stated in mortgage product criteria and reiterated in the mortgage Offer (ie the legally binding contract between lender and borrower).
Unencumbered properties may be ok for R2R, because only you own it. Mortgaged properties are of course also 'owned' by the bank due to the charge secured on the property, and the T's and C's of the Offer must not be breached.
Unless a prior agreement is formally confirmed by the lender, the property (irrespective of whether it is a single let, holiday let, HMO or otherwise) must only be let out as per the product criteria stipulations.
As also mentioned in earlier posts, having the wrong mortgage in place may also invalidate the property insurance in place too.
We are a very busy property investor focused mortgage Firm, and yet we do not get involved in funding R2R schemes at all. We have never knowingly enabled a new mortgage for a property that was subsequently sub let out.
So, to conclude, there may be lenders and insurance companies providing solutions for R2R scenarios, but be wary of the legal position for you, and the people who live in your property. The occupants deserve a peaceful enjoyment of your property and should any misfortune arise and a claim is made against your insurance, you need to make sure that the policy is not null and void due to an occupancy which breaks the mortgage terms.
caveat emptor... Read More

This is a matter for a tax adviser, however I also have a couple of notes, too.

Firstly, because of the additional IHT relief for main residence (https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band) I think (if this can indeed be applied) then the sum is;

£1.5m (higher value used as 'worst case scenario')
divide by 2 (each sisters share)
= £750K

£750K - £325K (nil rate) - £150K (19/20 - additional rate) = £275k.

£275k x 40% = £110k. = IHT liability

And so it's the £110k which needs 'repaying' / protecting.

(ps the £150k relief is increased to £175k for the 20/21 tax year)

There are so many ways to reduce / mitigate / eradicate and also repay this sum, and here is another one;

* whole-of-life life insurance policy, written in to Trust, for £110k, for a non smoking 'late 60's' person, could be arranged at a (standard rate) monthly premium of approximately £300pm.

For a 59 year old £180pm
For a 49 year old £125pm
For a 39 year old £85pm

And WOL life insurance policies are extremely flexible so as regular reviews are carried out and adjustments to sums assured are required, it's simply an internal amendment and no fees or professional charges are necessary. In fact, we don't charge to set them up in the first place either.

Now, for some people, the immediate thought is that £300pm (for a 'late 60s' policyholder) is a lot of money. However, the actual fiscal balance is > pay out £110,000 (at any time from today onwards) .... or £300pm. If - in the worst possible situation - the lady died one day after the policy started, all that has been paid out is £300. And in return, her Trustee would then have the full £110,000 to pay the tax man.

Insurance is a risk and there are balances to consider.

So, this is just another option, in addition to the estate planning Trusts, loan arrangements, investment bonds, etc.

The above is not personalised advice but simply a generic overview of possible options (which will only be formalised after our Advisers have carried out a proper Fact Find, received the specific IHT tax liability from a professional tax adviser, and we then provide recommendations and insured advice).... Read More

An interesting conundrum.

1) "The main condition surrounding the grant is that you must rent the property to LHA tenants for 5 years or ‘lease’ the property to the council for 5 years once the council gives you the grant and you finish the work."

This is the first quirk - most BTL lenders require a straightforward 6 or 12 month tenancy agreement (some up to 36 months) and of course there are still some lenders who won't lend on a property with 'DSS'/LHA tenants. So straight away the quantity of lenders that you would otherwise have access to, has significantly shrunk.

2) "If you wish to dispose of the property within those 5 years, you are simply required to repay the grant in full, otherwise the grant is just free money."

How is the grant money 'contracted' to you? Is it a charge on the property? This may be a consideration (issue) for the lenders too. A copy of the grant conditions would need to be reviewed before presented to any lenders.

so, taking the above in to consideration ....

3) "My concern in how mortgage companies will view the situation and whether it would reduce my chance of getting a, good rate, mortgage."

..... it won't be straightforward, and of course there are all of the other factors to assess as well, such as size of existing portfolio, aggregate LTV's, required LTV, rental income stress calculations etc.

We can possibly assist on a case by case basis, and so to contact my Team of Brokers, click on my profile link above.... Read More

Property owners being informed about the appropriate mortgage products for the type of tenancies they operate.

Renting a property out whilst having a resi mortgage in situ (without consent to let) is a breach of the terms
Standard BTL for AirBnB is a breach
Multi letting a property when the BTL mortgage only allows a single AST tenancy is a breach
Expired consent to let (they only usually last for 12 months) is a breach
.... And so many more.
Training a landlord to adhere to laws and rules should at least touch upon these subjects, but they are rarely included.
Happy to offer my 26+ years of experience as a Broker (not to mention my circa 20 years as a landlord too), Tessa.... Read More

I'm looking at a deal for a Client at the moment - not necessarily using the product above, but of course it would be remiss not to offer as an alternative option for consideration - and he has a £1m property in west London, and needs a £200k mortgage. The (standard) mortgage would be approx £500pm / £6k pa, but this outgoing is of course a reduction in his cashflow and when the tax bill arrives, if he decides that this strategy is right for him, then he will have the £6000 'saved' to use towards the tax. Just one of the many features and benefits of this product. So, not just for the 'miserable peasants' Mick ( 🙂 ) and not just to put towards holidays etc., but also clever financial planning for future cashflow and business strategy arrangements... Read More

This is not new. Canada Life is the new trading name for Retirement Advantage and I / we / Property118 published the launch of that product a couple of years ago > https://www.property118.com/buy-let-equity-release-retirement-advantage-launched/
The concept may now be years old, but the principle is still fantastic for the right borrower.
And available via my specialist / Lifetime Mortgage brokerage, which is authorised to advise in the areas. Contact details via my profile link above.... Read More

We have helped many MX / Rosinca borrowers in similar situations and with similar concerns as yourself, over many years.

And not one had any issue or problem.

It does help if your account(s) have always been kept in good order and therefore there is no sniff of a breach of their terms.

And of course it helps hugely if you work alongside a professional mortgage brokerage who has been involved in such cases, too.

We'd be very happy to help all MX / Rosinca borrowers with reviewing all options and providing solutions from across the market.... Read More