11:25 AM, 18th July 2016, About 5 years ago 3
I am Looking in Depth at the remortgaging process and I have seen some big changes to the BTL lending criterias of recent as I haven’t re mortgaged for a number of years.
Being from the South East where yields are not that good what are people thoughts on what looks to be all lenders applying stress testing i.e…The rental income must cover 125% – 145% of the mortgage interest calculated at a notional rate of between 4.99 and 5.99% depending on which lender even though in many cases the actual pay rate is only around 2%.
Surely this is a bit excessive?
This seems to be a bit of a brick wall as I cant see how any product above 60% LTV would stack up in the South East on remortgages or purchases. Surely this must be preventing many thousands of BTL investors from re mortgaging at all, let alone releasing money.
What happens when Base Rate does start to go up and Landlords then decide to fix everything quick, but cant because the stress testing is preventing them from doing so, because the figures just don’t stack up?
How are investors releasing funds from existing properties, second charges? Maybe I am missing something, but surely this is a problem.
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