Is a single Portfolio Mortgage a good option?

Is a single Portfolio Mortgage a good option?

11:24 AM, 27th October 2014, About 10 years ago 4

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I have a small portfolio of 5 properties that I let and one that I live in. Is a single Portfolio Mortgage a good option?

Two of the properties are owned outright the others have BTL mortgages.

All mortgages including the one I live in are interest only.

Ease of managing a single mortgage and being able to release equity from the total portfolio is my aim.

I would appreciate views on the pro & cons and availability of a single Portfolio Mortgage for all the properties.

Also any recommendations of possible lenders/brokers.



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Mark Alexander - Founder of Property118

11:31 AM, 27th October 2014, About 10 years ago

Horses for courses Rob.

In addition to the advantages you have quoted, a portfolio mortgage can help to sqeeze every last penny out of your financing options. This is because a low yielding property may only attract low LTV funding on a stand alone basis due to rent cover issues. However, when combined with a high yielding portfolio you may well be able to borrow up to maximum LTV's.

I have one of these mortgages with TMW, but not for my entire portfolio.

The major downside comes when you want to sell or refinance just one or two of the properties. Chances are that you will need to get them all independently valued and the remaining lending will have to fit the portfolio mortgage lenders criteria at the time of redemption. I encountered this problem when I agreed to sell one of my properties to a tenant which formed part of the security for my TMW portfolio mortgage. It took an age to get a redemption figure and I ended up having to use 100% of the sale proceeds to reduce the remaining debt. I was not a fan of portfolio mortgages at that point but it seemed a great idea at the time I took the portfolio mortgage.

Sian Wyatt

14:14 PM, 27th October 2014, About 10 years ago

I also had two properties in a portfolio with TMW. When I tried to sell one it took weeks to get a redemption figure out of them as they insisted on revaluing both properties, and then only valued one and I had to wait another two weeks for the other to be valued.. My solicitor had not realised this would be a problem so had only asked for the figure when we exchanged - it had been touch and go that the sale would proceed until then. Fortunately my buyer was a very patient landlord who was able to wait a further four weeks (for a fee) - if I had been selling to an owner occupier in a chain I could have been in great trouble. TMW were very offhand with me, promising the figure in a few days and then not coming through.

Yes you may be able to release more equity, but bear this in mind when you come to sell.

Rob Crawford

16:26 PM, 27th October 2014, About 10 years ago

Thanks Mark & Edna, selling on certainly seems to be a disadvantage. I suppose if you are aware of this issue in advance then it could be managed around accepting the additional valuations costs.

Sam Collett

12:12 PM, 28th October 2014, About 10 years ago

I have a good sized portfolio and have declined my commercial bank from lending against my whole portfolio. The reason for this is flexibility. I like the flexibility of having loans and mortgages with other lenders and have not seen a concrete enough business case (i.e. interest rates, LTV) for me to change.

Moreover, I also believe you should not have all your eggs in one basket. I have been stung by several lenders changing the small print t&cs on me and that has now created mistrust.

I therefore feel it is prudent for me to spread my property holdings with lenders who offer the best business terms for me and the investments going forwards.

I can also say that this line of thinking, has never affected my ability to borrow with any lender, nor with the aforementioned commercial bank who I still hold loans with and would lend to me today.

Whatever you do, you should always do what is best to ensure the success of your business.

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