Remortgage now to avoid PRA rules from September?

Remortgage now to avoid PRA rules from September?

10:56 AM, 17th July 2017, About 7 years ago 18

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I only have 4 properties, but fall into the ‘portfolio landlord’ category. The interest only mortgage on one expires in the middle of next year. I have approached the NLA mortgage team and found I can remortgage to Kensington, Paragon or Aldermore, albeit with a monthly increase of £80 – £100. (All mine seem to be on very low SVRs!)

The rental income easily stacks up, so no problem there, and the tenants are my tenants from heaven, having rented the house since 2010 and never missed a payment. One lender requires proof of 12 months rental payments on ALL the properties (which is no problem), but none so far are asking for personal income and expenditure details.

My choice is a bit limited, because I’m in my 60s and not all lenders are happy to lend beyond retirement. I also have a personal loan and credit card balance, which are easily affordable, but will I fall foul of the the tightening of the rules if I wait until next year to remortgage?

I’m even thinking I may have left it too late to avoid the new rules, if the process takes a few weeks?

I haven’t mortgaged/remortgaged for about 10 years so I’m having to get up to speed on the latest regs!
Any advice, and also any broker recommendations, would be welcome.

Thanks in advance:)

Annie


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Comments

Annie Landlord

9:18 AM, 23rd July 2017, About 7 years ago

Reply to the comment left by "H B" at "23/07/2017 - 07:39":

Hi, the mortgage term is coming to an end. It was only a 9 year term for some reason. I guess because the lender (old Cheltenham and Glos) didn't want to lend past age 65. The ltv is 77%. The broker has found at least 3 lenders who will offer that. The market valuation may be the problem. If the house doesn't value to what I paid for it obviously I won't get the lending I require. I'm leaning more and more towards trying to sell it, but would hate to have to evict my tenants because they are lovely.

Sean Graveney

12:40 PM, 23rd July 2017, About 7 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "22/07/2017 - 15:36":

Apparently Santander have already announced they'll be pulling out of BTL Portfolio lending...

https://bespokefinance.info/p/portfolio-landlord-requirements/

14:46 PM, 23rd July 2017, About 7 years ago

Are all/any of your mortgages Interest Only?
Also, where do you own in the UK that has not seen any price appreciation in @10 years?
What does the maths look like re. S24 now?7

denis knockton

17:05 PM, 23rd July 2017, About 7 years ago

Annie.

Don't make a hasty decision to sell. Although, the paperwork and the demand for info. from the lenders will appear huge at first, this is new to all of us, the landlords as well as to the banks. It will take a while to get used to it but we all will. The whole point is to ensure that those who are landlords and buying property know what they are doing. The banks want to see that the whole portfolio works and not just the individual application you are making. By all means, review your portfolio and look to reduce LTV any higher than 70 -75% as well as other debts. Best of luck what ever you decide to do.

Howard Reuben Cert CII (MP) CeRER

14:24 PM, 24th July 2017, About 7 years ago

Hi all

The new PRA rules don't formally start until 1st October, but some lenders stared to introduce their new portfolio underwriting rules as from January of this year. Some lenders (eg Shawbrook) are already long established portfolio lenders and there won't be much change to the way they specfically work, but for the 'high street' BTL lenders, there will be many varying changes about to hit us all.

Some lenders will choose not to be part of this, choosing instead only to work with landlords who own 3 or less properties. Others have (and will) decide to restrict the properties in 'the background' from the deals they are lending against, and some will decide to ask for so much more info than ever before. This is all in addition to the more stringent and scrutinising affordability and rental calculations which ultimately determine how much you can release from your property(ies), and quite likely the amount you will be able to borrow (based on the same rental income amount, property value and LTV) will be less (from 1st October) than you can draw down today.

The moral of the story is that change is inevitable, change has always happened, the market shifts and yet professional and specialist mortgage brokers, such as the Team at H D Consultants (see my profile link), are working strenuously to keep up to date with the changes , meeting lenders and underwriters all the time, so that we can help you to have swift and efficient access to the mortgage options, thereby providing you with maximum cash, flexibility and from the widest range of high street and challenger banks, specialist lenders and the myriad of other BTL lenders.

You may certainly be asked for more paperwork (and homework, ie business plans etc) but we will be able to tell you in advance of an application what is required and together we can package up an efficient application and push the portfolio cases through swiftly for you.

NOW is the time to release the (maximum) equity you need.

If you own more than 3 BTL's and you think you may need to shift equity / mortgages around, then please contact us asap to discuss this and to start the process.

To check us out, please visit our website and read the testimonials and awards that we have received over the last 24 years that we have been in business.

We hope to help you all too, and as above, if you have been thinking about your BTL mortgage situation recently, the time is ticking down to 30th September and we all know how slow the lenders can be in underwriting cases so the quicker we start, the better for you.

Howard.

Annie Landlord

22:19 PM, 24th July 2017, About 7 years ago

Reply to the comment left by "denis knockton" at "23/07/2017 - 17:05":

Thanks for the comments everyone. Its useful to hear of other landlords' experiences. I have an appointment with the existing lender to discuss an extension to the term, or a possible remortgage. Failing that I will start the remortgage process with probably the team at NLA (who seem to be the team working for many other property associations and websites) My desire to sell one or two properties is simply based on a real concern that btl will become progressively harder, particularly if there is a change of government, and I am able to consider selling now as I have income from pensions as a cushion. S24 will have an impact, but by no means an insurmountable one. Someone asked where in the UK have values not risen over 10 years. Well, Halton and St Helens, Merseyside for sure!

Jireh Homes

18:29 PM, 29th July 2017, About 7 years ago

Hi Anne - recently went through a number of re-mortgage applications prior to fixed term expiry and the extent of information requested was more limited than that now being introduced as sought new product with existing lender with no changes other than a better interest rate. After some research decided not to approach other lenders as the pain and potential rejection was too high. Choice to apply lenders desk top indexed valuation as reduced my LTV percentage.
Allan

Annie Landlord

10:39 AM, 30th July 2017, About 7 years ago

Reply to the comment left by "Jireh Homes" at "29/07/2017 - 18:29":

My current lender will extend the term, but only by 10 years. The rates, however, are very good and the process relatively simple. Their desktop valuation came out much higher than mine and that may swing the ball in favour of them. In 10 years I may well want to sell up completely, if I haven't already done so by then! Another question for those in the know: Can I start the process with my current lender and another broker simultaneously? The critical factor is the valuation, so I would like to get that asap.

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