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If you are growing your investment portfolio then you are likely to need tailored buy-to-let mortgages for professional investors and there are a broad range of options open to you.
Each lender will, of course, have their own criteria but this is the type of information that most lenders will want to know:
Value of the unit(s) and type, i.e. purpose built, conversion, size, floor, etc
Location, is it over or near food outlets such as take-aways, restaurants or noisy businesses such as a pub
What is the EPC rating? A ‘C’ will be a minimum requirement and some lenders will discount their lending rate or fees for higher rated EPCs. This may also be potentially received retrospectively if improvements are made during the term of the mortgage
What is the lease or freehold
What are service charges or ground rents
What are the likely incomes from the units
Is the property going to be held in a company or personal name(s)
Your level of experience as a landlord
Tailored Buy-to-Let Mortgages for Professional Investors – Lend Rates and Fees
Funding can be on a fixed or variable rate with some lenders that will also promote ‘Limited’ offers with special rates. As an example, at the time of writing, a 2-year fixed rate of 3.49% with 5% fee is available.
The lender will charge a product fee which will typically be from 2% to 5% and this can be added to the loan. Other expenses to consider will include lender application fees, legal and valuation fees.
The term of the loan can be determined at the outset, but 20 years is typical with longer possible. Where a fixed rate is taken this can be over 2, 5, 7 or 10 years depending on the lender and the borrower can then seek to refinance at the end of that fixed term or revert to the default, much higher, rate.
Leverage can be up to 75% is usual, although 80% is possible where the rent is really strong and the units satisfy the lender criteria. However, 70% is more typical for a commercial property. Loan amounts of up to £35m mean that substantial portfolios can be financed.
You can expect a requirement to provide personal guarantees of up to 25% as well as first charge security on the asset of course.
How a Buy-to-Let Application will Work
The process will depend upon the lender but this is typically;
A Decision in Principle (DiP) is received
Full application is submitted
Underwriter assessment
Valuation
Formal loan offer
Legals instructed
Completion
The time this takes will depend upon the lender and the complexity of the case but will be around 5 – 10 weeks from receipt of the formal offer. Multiple applications can be managed into one rate and one DD.
It is also worth noting, especially if the subject properties are a new build, that some lenders will expect you to have tenants in residence before the mortgage completes but not all require this.
If you are looking to invest in, or refinance, a property portfolio then get in touch and we will be pleased to go through the tailored buy-to-let mortgages for professional investors available.
We can also help with cashflow funding for landlords with lump sum facilities of up to £50,000 possible where you need a quick injection of cash.
Call us today on 01244 953 360 for an informal chat with one of our team.
If you would like to learn a little more about us then check out our LinkedIn page here.
For more information on Tailored Buy-to-Let Mortgages for Professional Investors talk to Developer Money Market