9:33 AM, 7th November 2018, About 3 years ago
From time to time, a lender comes to the fore because of their flexible underwriting and/or unique criteria points.
One such lender is Magellan. They popped into our office last week, and they just kept coming out with one gem after another.
BTL Ltd Co
No floating charges or Personal Guarantees
No compulsory legal advice required
General BTL Criteria
No Credit Scoring
35-year minimum lease at end of mortgage term
Refinance within 6 months ownership (up to Purchase price plus works value)
First Time Buyer/First Time Landlord, including HMO’s (Guarantor required)
No ERC’s on Tracker rates.
Excellent criteria points, but I have saved the best two nuggets for last;
If you’re struggling with the rent to cover the mortgage, Magellan take into account not only your tax rate, but also your ownership percentage.
You will be aware that your tax rate determines the rental coverage figure, ie, usually 125% for basic rate tax payers or 145% for Higher Rate Tax payers. But what if you only own 1% of the property? This could be the result of one person having a high income, where the other property owner is not working, for example. In this instance, the lender allows an individual assessment of circumstances, taking tax rate and percentage ownership into account. This tailored approach means that greater amounts of money can be lent than a “one size fits all” approach by other lenders.
The lender can work on inter-family undervalue transactions, so long as the end LTV is less than 80%.
As an example – if someone is buying a £300,000 (market value) house for a purchase price of £260,000, they can get a £234,000 mortgage (90% of £260,000) so long as the overall LTV is less than 80%LTV of the real market value. In this instance the overall LTV is 78%.
I’m sure that these situations will fire your imaginations. If you would like to talk through a situation, please contact me using the form below and I will be happy to help.