Applying for LTD Co Specialist BTL products directly?

by Readers Question

7:50 AM, 18th April 2019
About 4 months ago

Applying for LTD Co Specialist BTL products directly?

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Applying for LTD Co Specialist BTL products directly?

Hello, I want to be able to apply for specialist BTL, commercial, bridging etc loans myself without having to go through a broker. After two failed BTL applications I’ve made a point to read every word of lenders criteria and understand it as much as possible, in fact i really enjoy the process being an analytical bunny.

This might be somewhat of a controversial statement and slightly offensive to you hard working mortgage brokers out there. But I’m at a point in my knowledge, where I understand criteria so can prequalify myself for loans and feel I can articulate my requirements.

There is a direct to lender solution that I found out about at the property investor conference last week molofinance.com, which in my view all loans will be originated like that in the future, with there always being a small proportion that need human intervention. Effectively mortgages, are just input in and input out and it’s understanding all the permutations of a loan that a computer would have the ability to understand if someone spent long enough putting all the data in and all lenders used the same system.

I am of the generation where I have been on a computer for 25 years now and don’t like dealing with middle people. I want ME -> LENDER.

Can anyone suggestion the best method of arranging limited company specialist BTL mortgages for myself without having to go through a broker. Save having to get a CEMAP or whatever the qualification is myself?

I look forward to hearing from you!

Many thanks

Keir



Comments

Neil Patterson

10:19 AM, 18th April 2019
About 4 months ago

Hi Keir,

Yes it is more than possible depending on criteria to source your own Ltd Co BTL mortgage. That is without question.

However, in this more specialist area the are many lenders that will not deal direct with consumers and some lenders that offer discounted products only to their introducer supply channels so it can be a false economy going direct.

I am personally fully qualified, but as I am not practising and constantly updating my knowledge of lenders, products, criteria and regulation I don’t know what I don’t know so would always use a broker.

You will also find a good broker team will have personal relationships with the underwriters and BDMs of lenders which can dig you out of a massive hole when things go pear shaped.

Alistair Cooper

11:36 AM, 18th April 2019
About 4 months ago

If you find and establish a relationship with a good broker I cannot see the benefit of taking them out of the sandwich (there is some fine meat out there, why opt for just bread & butter!)
My broker, Chris Young of the Buy to Let Business, (and those that have helped in the past, including Mark Alexander’s former colleagues) have got me and my mother through hurdles that simply would have been unsurpassable had I of been dealing directly with the lender.
I too like to understand the criteria and fit myself into deals (no doubt much to the annoyance of Chris!)
In the increasingly risk adverse lending market that personal contact with the underwriter will win over any computer algorithm.
I tried going direct to the Mortgage Works some years ago and learnt my lesson the hard way after losing two good property purchase deals in a row as they were so slow to respond and awkward to deal with. I regret that experience every time I drive past those properties and see them developed out with someone else (who probably did use a broker) enjoying the profit!
Don’t feel the broker is in the way; just get to know a good one and you will reap the reward of the modest fee many times over.

Mark Alexander

22:54 PM, 18th April 2019
About 4 months ago

Hello Keir

Let me begin by saying that I was a commercial finance broker for 20 years and a commercial lending underwriter propr to that, but I retired in 2009, so I have no axe to grind or financial incentive to respond either way. Nevertheless, here are the facts.

1) Commercial lending is rarely underwritten based on fixed criteria or pricing
2) Brokers have preferred lender relationships and vice versa
3) whilst all good brokers will have access to the "whole market" they will not all have the same levels of relationships with all the same lenders

Now let me put this another way. If you go directly to a mortgage lender you have zero credibility. A good broker will deal with the same lender and have a good relationship. If the underwriter has a pile of cases to consider it is likely that he will put the cases from his favorite brokers on the top of the pile. Why? Because he knows that his favourite broker only sends him the business that he want to do and that it is packaged in a way that he is familar with, so it is easier to say yes. As a result of this, the lender broker relationship results in a quicker turnaround. The underwiters are just like all human beings, i.e. they want an easy life. As a result, they provide the best pricing to clients of their favourite brokers.

As a borrower, it is virtually impossible for you ever to develop the same relationsips with lenders, unless you are completing new deals every day. Therefore, you need to find out which brokers are doing the most business with the lenders you want to deal with and then to approach those lenders though their favoured brokers. Good luck with that!

If you need any help, please note that the Founders of Property118 are also the founders of the NACFB (National Association of Commercial Finance Brokers). If you have ever wondered why the brokers we recommend so regularly win the top awards in the broking industry, this may give you some insight as to why.

Kevin

9:30 AM, 20th April 2019
About 4 months ago

You are always better off using a Broker, I was one for a long time. Tricky to place Ltd Co buy to let these days they always ask for personal guarantees so in effect you are underwriting the Morgage debt yourself. I have used best4let in the past and like any Broker if you give them your case warts and all they contact a Lender prior to submission and then conduct a decision in principle to avoid wasting time. If you do it yourself Lenders will vet every single item of paperwork and not take a risk on the case as they would through a Broker.
Fees are around £395 with many Brokers which in this climate is cheap when you consider their compliance fees to conduct their Business
legitimately.
If you have had a case declined it is down to the research of the Broker or valuations or personal circumstances. You will not win attempting to conduct this yourself and for a paltry fee why would you want to.

Laura Delow

9:07 AM, 21st April 2019
About 4 months ago

In bygone years clients might have been able to deal with lenders direct, but these last few years it's not so straight forward as lenders' criteria varies considerably & often the written or spoken word from the pre-sales material/team is not exactly the ways things really are. Criteria also constantly changes thus making it extremely awkward for even the clean straight forward deals to go through either at all or for the amount applied for.
Do not underestimate the value of a good broker. Knowing the minutie of every lenders' criteria is critical (which you say you have), but even if armed with this knowledge you cannot beat the direct relationship brokers have with lenders pre-underwriting teams to discuss the nuances of each case. Having the ability to package each case is also vital (a good broker never lets a case leave their desk until they "know" it will go through"), and lastly the ability / experience / contacts to massage a case through i.e. to speed up matters or challenge underwriters decisions i.e. it is not unknown for underwriters to wrongly interpret e.g. a freelancers contract with even pukka firms like the BBC or a client's Ltd Co accounts.
I know a lot about Will & Conveyancing law but would still rather pay an expert to get it right.
When a property costs so much to buy i.e. lenders arrangement fees, valuations & solicitors fees, stamp duty etc, it is poorly thought through not to spend a few pounds more using a loan/mortgage expert to not only get you the amount of borrowing required, but equally important, get you the best deal out there (some of which clients who go direct cannot access). All of which also gives you the protection of the FCA if ever the advice given proves to be wrong. You don't get that going direct.

Howard Reuben CeMap CeRER

18:57 PM, 29th April 2019
About 4 months ago

Keir, it looks like a fairly unanimous vote of confidence for working with a Broker.

I prefer the term "working with" rather than "going through", because one implies that you understand the crucial and valuable support that a property investor needs from a professional, qualified, experienced and insured Broker, and the other implies that you only see the Broker as a necessary evil middleman to facilitate an application form.

Not only does Mark recommend us, as Property118's long standing, award winning and expert Team of Brokers, but me and many of my Team are also portfolio landlords as well, so we understand the need for value, flexibility, strategy and - very importantly too (and something which is missing from direct>lender) - we advise on the debt protection and estate planning as well.

Broker vs Salesman? Broker vs online algorithm? Broker vs direct? Product selection vs portfolio balancing strategies? Total to pay analysis vs cheapest interest rate?

To remove yourself from the exclusive deals, the full access to market, the ability to negotiate discretion from the underwriter, the insurance discussion, the ever-changing criteria which is not always published quickly enough, the overall value which determines more than just the interest rate ..... by doing it yourself without the tools, relationships and understanding what the right underwriter needs for a speedy application processing, can sometimes be more costly, than working with a Broker who, after all, is on your side anyway.

It's always your choice, but even the ancients once said 'caveat emptor', so this debate has been around a long time 🙂


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