Buy to Let Mortgage products and market update – essential reading

by Neil Patterson

13:46 PM, 29th October 2013
About 5 years ago

Buy to Let Mortgage products and market update – essential reading

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Buy to Let Mortgage products and market update – essential reading

Having just updated the Buy to Let mortgage products on our own in house Buy to Let Mortgage sourcing system and calculator I thought I would give you a summary of what’s Hot or Not in the current market.

Virgin Money have been added to the system because of their helpful attitude and criteria which includes:

  • Day one remortgages – So no need to wait 6 months to remortgage for cash purchases, refurbs, Auction purchases etc
  • First Time Buyers
  • Regulated Buy to Let

However Maximum LTV is 70%. Stand out different product is a 5 year fixed at 4.09% with £750 Cash Back and 2.5% product fee (better for smaller loan sizes where looking to fix costs long term is important.

The Mortgage Works (TMW) always been and old favorite of mine going back to 2003 have a selection of 80% LTV products and no income requirement for existing landlords.

Interestingly they have no longer term products currently above an initial 2 year deal. This will either be because they have purchased no long term funds or are uncertain of market direction at the moment. Example products range from:

  • 2.49% two year fixed with 2.5% arrangement fee at 60% LTV (really only a headline grabber) to
  • 4.14% 2 year fixed 2.5% fee at 80% LTV (one of the lower interest rate high LTV products)

BM Solutions were the old industry go to lender until introducing a maximum exposure of 3 mortgages, but still have one of the most comprehensive range of products up to 75% LTV.  They are also often helpful for flats above or adjacent to commercial premises.

  • 3.19% 2 year tracker £1295 fee 60% LTV
  • 3.89% 2 year tracker 0.5% fee 75% LTV
  • 4.34% 3 year fixed 1% fee 75% LTV
  • 4.99% 5 year fixed 1.25% fee 75% LTV

BM Solutions have NO customer service staff so any mortgages or further advances even must be done by a broker.

Kent Reliance are really mostly famous for being THE 85% LTV lender.

However minimum property value £75,000, proof of £25,000 income required stress tested at 192 times monthly rental income.

  • 4.99% 2 year fixed 2.5% fee 85% LTV reversion rate 6.58%
  • 4.89% 2 year discount 2.5% fee 85% LTV reversion rate 6.58%

Aldermore have a good range of 80% LTV products at 4.98% including 2, 3 and 5 year fixed and a varibale rate for the term. They will do day 1 remortgages for properties bought with a bridging loan on a like for like basis and inherited properties.

They will also consider customer with light adverse credit which very few lenders will allow including:

  • 1 or 2 missed mortgage payments over 12 months
  • CCJs and Defaults registered over 3 years ago
  • Missed unsecured credit payments such as credit cards, mobile phone, loans et

Principality have a penalty free no tie in 2 year discount product at 3.39% with only a 1% + £99 fee at 60% LTV.

Also interestingly they will consider Holiday Homes on their BTL range!

Godiva owned by the Coventry building society are the “Does what it says on the tin lender” I liken them to the Yorkshire tea, or a sliced white loaf of a the buy to let product market. Nothing spectacular just a good solid no frills value for money products.

  • 3.49% variable penalty free for the term of the loan, £999 fee max 65% LTV (very good value with flexibility)
  • 3.79% 2 year fixed, £500 fee max 65% LTV
  • 4.74% Standard variable penalty free no fee max 65% LTV

Cost and product wise the market has been reasonably stable with small improvements adding up each month giving a healthier range of options available especially in niche areas such as:

Terms beyond retirement age, Bridge to Let, Remortgages inside 6 months, Ltd company applications, Higher LTV, Lower fees, Light adverse, Holiday let and more.

All of the above products, lenders and many more can be found by using our Buy to Let calculator and quote engine Please Click Here

If you need any assistance with a Buy to Let mortgage you can also:

Email: info@property118.com or

Telephone: 01603 489 1182013



Comments

DC

17:13 PM, 29th October 2013
About 5 years ago

TMW - 2.49% two year fixed with 2.5% arrangement fee at 60% LTV (really only a headline grabber)

Actually Neil, if you don't mind going in with a 40% deposit (definitely worth considering on cheaper properties) this product is still quite competitive compared to TMW's other products when you compare the true cost over the term of the loan. I have used it a few times recently with purchases, however what you do need to be aware of with TMW is their changing criteria, such as not offering a loan if it's for a neighbouring property to one that you already own (even though they already lend money to me on the next two properties in the block!).
The other thing that I have paid for with TMW is on valuations. They valued 3 identical properties for the purposes of remortgage and further borrowing late last year within the space under 3 months and property number 3 fell short by a relatively big percentage over the other two.

Even though an appeal produced a slight uplifting of the original valuation it was hardly worth the effort and they wouldn't listen to reason. They could give no explanation for this other than to blame the surveyor so it wasn't viable to remortgage and it cost me just over £500 in fees.

I am currently using Aldermore and in comparison to TMW they are so quick and efficient, which helps to make the marginally higher rate bearable.

Lyndon Whitehouse

8:21 AM, 30th October 2013
About 5 years ago

I'm in a position where My wife and I have 28 BTL mortgages. With the exception of Mortgage Works and Aldermore, I can't find any other lenders out there due to maximum exposure figures!
I've been in this game for 13 years and have never defaulted once. I'm a bloody good bet for any lender!
Any ideas or thoughts on that?

Lyndon Whitehouse

Neil Patterson

8:31 AM, 30th October 2013
About 5 years ago

Reply to the comment left by "Lyndon Whitehouse" at "30/10/2013 - 08:21":

Hi Lyndon,

Even with 28 properties there will be lenders out there for you, but as ever who depends on many factors.

If you wish to make contact with me and have a whole of market product search done on your behalf let me know. Then it will be down to LTV and product cost you are looking for.

For some unknown reason since the Credit crunch lenders have pulled away from large portfolio landlords, which makes absolutely no sense as you are more likely to know what you are doing and less exposed to risk by individual problems.

However there has been some improvement over the last year with quite a few smaller more commercial lenders coming into the BTL market, biggest one being Shawbrook as an example.

Neil Patterson

8:41 AM, 30th October 2013
About 5 years ago

Reply to the comment left by "DC " at "29/10/2013 - 17:13":

Hi DC,

Yes you are quite correct and maybe I was a little hasty calling the 2.49% a headline grabber.

With a 2.5% fee it really makes it 3.74% over 2 years which is not bad and on a smaller value loan a percentage can work out better than a fixed fee.

The problem is I speak to a lot of people that Google BTL rates and see they can get 2.49% but don't understand products are priced by LTV when they really need 75 - 80% and may not match criteria.

Most decent products are a bit like a set of kitchen scales that have to balance. What they give in one hand they take in another, so rate is misleading when you should look at what fits best in your circumstances as you have done yourself.

There is never a best product for everyone, but we all have our personal favorite types and lenders.

Lyndon Whitehouse

5:41 AM, 31st October 2013
About 5 years ago

Reply to the comment left by "Neil Patterson" at "30/10/2013 - 08:31":

Thanks for your comments Neil. I've just completed with TMW again. I do use a trusted mortgage broker, however, at some point I will be in touch.

Neil Patterson

17:14 PM, 31st October 2013
About 5 years ago

Thanks Lyndon,

I look forward to chatting in the future 🙂

James Noble

20:47 PM, 1st November 2013
About 5 years ago

Hello. I was hoping to buy a house in Bristol that has been divided up into four self-contained one-bed flats. It is being managed by an excellent local agent. All four flats are occupied and have been for a while. £190k to buy and income of £21,000 gross. (agent takes a well-earned 10%) Yet, I can't get a mortgage because there are four flats in one property! Why should this be a problem? My bank won't take it on, and a broker recommended on this site also can't help. Do you know of a mortgage company that might be able to offer £90K ? (I have cash for the rest of the price.) James

DC

10:20 AM, 2nd November 2013
About 5 years ago

Reply to the comment left by "James Noble" at "01/11/2013 - 20:47":

Will you be buying the freehold James and if so did the broker try Aldermore?

James Noble

11:58 AM, 2nd November 2013
About 5 years ago

Yes, I will be buying the freehold. I'm not sure just how wide the broker went. But I shall approach Aldemore myself. Thanks for the tip.

Neil Patterson

15:53 PM, 2nd November 2013
About 5 years ago

Reply to the comment left by "James Noble" at "01/11/2013 - 20:47":

Hi James,
In the old pre-crunch days there were a few mainstream BTL lenders that would consider a Freehold house split into four self contained Flats.
The options have now narrowed but we are talking about a low LTV here so it would be interesting to chat with you to find out what other factors are involved and if there is anything else criteria wise that is causing an issue.
If you want to give me a call in the office on Monday on 01603 489118 I will do my best to take as much info as possible and have a call round for you.

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