Tag Archives: LIBOR

Buy to Let mortgage products and criteria – market update Buy to Let News, Latest Articles

After updating and writing the article on our Buy to Let mortgage sourcing system and calculator I thought I would give readers an update of what is still available and popular in the market.

You can find all these products on our system and get a quote (CLICK HERE), but many people ask me what has changed since they last took out a Buy to Let mortgage normally pre-credit crunch.

Loan to Value (LTV):

The industry standard maximum LTV is now 75% as opposed to 85% up to 2008.

You will find the cheapest rate products and and fees around the 60 – 65% LTV region with sub 3% short term rates or products with no arrangement fees and fees assisted such as Valuation and Legal cost.        Eg. 2.49% 2 year fixed with 2.5% fee

80% products will tend to have higher rates around the 5% point, with increased arrangement fees and stress testing to cover the perceived increase in risk compared to lower LTV products. A popular market provider of 80% LTV products is The Mortgage Works with rates starting from 4.14% 2 year fixed with a 2.5% arrangement fee to 5.29% with a £995 fee.

85% is still available with Kent Reliance but at a cost to rates fees and criteria – 4.99% 2 year fixed product fee 2.5% and reversion rate after initial term 6.58% SVR (ouch). Minimum property value £75,000 and £25,000 applicant earned income with proof.

Stress Testing:

How much you can borrow based on the rental income aka Stress Testing has actually changed very little over the years since 2008.  With reduced Loan to Values, lower property prices and increased rental income the amount you can borrow based on rent is not normally an issue unless the property is particularly poor yielding or the Loan to Value is high with a high stress testing.

The average stress testing figure is based around 5% notional rate and covering the interest by 125%. This in plain English equates to being able to borrow 192 times the monthly rental income. However at lower LTVs and interest rates this could be as much as 300 times or as little as 154 times for 80% products.

Criteria:

You can still borrow on Buy to Let mortgages for non standard properties such as HMO’s, new build flats, Multi-Unit, flats above none smelly or noisy commercial, however you have to be prepared depending on lender and the property for a lower LTV, higher interest rate and higher stress testing to cover the lenders perceived risk again.

Borrowing on Buy to Let mortgages in the name of a Limted company is still possible with Lenders such as Keystone, but it is preferred to be a Single purpose Vehicle rather than a Trading Ltd company and the options are vastly reduced. Therefore the tax advantages of purchasing using a Limited company can often be negated by difficulty and cost in finding finance.

Example Products:

Some other products not mentioned that I noted when updating the system as potentially stand out were:

3.99% 2 year Tracker Libor Tracker No Fee and Free Valuation 75% LTV

4.98% 5 year fixed £1,999 fee 80% LTV

3.49% Flexx variable mortgage for the term Fees £999 with no early repayment charge and free remortgage service and Valuation 65% LTV

4.74% Standard variable for the term No fees No early redemption penalty free valuation 65% LTV

2.99% 2 year fixed 2.5% fee 75% LTV

To Search for all the products on our own in house Buy to Let mortgage sourcing system and calculator please CLICK HERE

For any assistance you may need with a Buy to Let mortgage please email info@property118.com

Tel: 01603 489118Buy to Let Mortgage system

 


Precise Mortgages launch Bridge to Let product Buy to Let News, Commercial Finance, Landlord News, Latest Articles, Property News

Precise mortgagesThe intermediary only lender Precise Mortgages has today launched the Uk’s only true Bridge to Let Product for development and refurbishment BuytoLet projects.

If  you take out a Bridging loan with Precise Mortgages you will now be able to switch it into one of their Bridge to Let products (effectively a Buy to Let loan) from month four onwards with no additional valuation or legal fees. Customers will be allowed to take the BTL loan out up to 75% of the property’s post works valuation so, if you have enhanced the value of the property, you will be able to withdraw some or all of your working capital.

The lender has combined its Bridging products with its traditional BTL products. The BTL element offers terms of up to 30 years, on an interest only basis, with no valuation or legal fees, and no need to change lender.

This offers a one stop shop for Development or Refurbishment projects where the plan is to keep the property upon completion of works and let out on a Buy to Let basis.

Standard Bridging rates apply starting at 0.85% per month with the Bridge to Let element starting at 4.39% and the 2% Arrangement Fee can be added to the loan.

Prime Bridge to Let product and Criteria details:

  • Rates from 4.39% reverting to Libor (currently 0.51%) plus 4.98%
  • Maximum LTV 75% of the post works valuation
  • Product fee 2% on all products and can be added to the loan
  • Max Loan size £500,000 for 75% LTV or £1,000,000 for 70% LTV
  • No Minimum income requirements, but must be employed/self employed and supply last 3 months bank statements
  • Rental income must cover 125% of the interest payment or reversion rate which ever is the higher
  • Age range 25 to 75
  • Maximum 1 property with Precise mortgages, but unlimited portfolio size with other lenders

Near Prime Bridge to Let Product and Criteria details:

  • Allowable adverse Credit
  • Defaults – none in last 12 months with max 1 default in the last 24 months (max £1500)
  • CCJs – none in last 12 months with max 1 default in the last 24 months (max £1500)
  • Arrears – none in last 12 months and maximum 1 month in the last 36
  • Rates from 5.39%
  • Maximum 1 property with Precise mortgages, but unlimited portfolio size with other lenders

 

If you would like our preferred broker to help raise finance for the above type of project please complete the form below and provide a short overview of the deal and your requirements or call us on 01603 489118 and we will do our very best to help.

[si-contact-form form=’5′]


Switch to a BuytoLet mortgage within six months of purchase Commercial Finance, Landlord News, Latest Articles, Property News

New commercial finance facilities are offering the option to switch bridging finance to a  BuytoLet mortgage within the normal 6 months period other lenders require you to wait.

Borrowers are now able to bridge  70% of initial purchase price and then, within six months, switch to a BuytoLet remortgage based on 70% of the ” new, higher valuation figure.

The best available product is 0.69% per month for the bridging finance and then 4.7% plus Libor for the Buy to Let term facility.

 

Continue reading Switch to a BuytoLet mortgage within six months of purchase


Pradip Thaker of Gillingham Kent GOOD Landlords Campaign Sponsors

The GOOD Landlords CampaignPradip Thaker of Gillingham Kent

I have been a landlord for the past seven years and have seen things getting from bad to worse.

Agents I have used are not doing the work they supposed to such as managing late payments, arrears,
and getting  just anybody to carry out repairs sometimes without consent.

Mortgage companies are also putting up rates and Libor.

I have a few DSS tenants and new laws soon in force that will pay rent paid direct to tenants are going to cause various Headaches not least of which non-payment.

I am therefore sponsoring the Good Landlords campaign.

Continue reading Pradip Thaker of Gillingham Kent


Shawbrook Bank slash arrangement fees and rates Buy to Let News, Commercial Finance, Landlord News, Latest Articles, Property News

Shawbrook Bank specialists in commercial and BTL finance have reduced their arrangement fees to 1.70% a saving of 0.80%, and their rates by up to 0.60% across their term product range.

Big advantages Shawbrook have over many other commercial lenders is their desire to lend with far less onerous stress testing compared to high street banks, Interest Only for commercial and BTL property and lending directly to Limited companies.

Malcolm Jones of Brooklands commercial finance said ” Shawbrook are specialists in good sense not using a tick box appraoch and allow me direct access to discuss cases with underwriters. This is invaluable when trying to get cases through for clients and they also have excellent turn around times.” Continue reading Shawbrook Bank slash arrangement fees and rates


Commercial Finance Loan Directory Commercial Finance, Landlord News, Latest Articles, Property News, Property118 News

The Loan Directory is a regular feature publishing examples of the most competitive and frequently used products in the commercial market to help readers identify possible funding facilities for their own projects.

In this latest update we provide a selection of the most competitive deals on offer in respect of Commercial Finance for Investment and Owner Occupier mortgages. Market leading features are bold for easy reference. Continue reading Commercial Finance Loan Directory


Commercial Finance Loan Directory Commercial Finance, Landlord News, Latest Articles, Property News

The Loan Directory is a regular feature publishing competitive and innovative product offerings to help clients identify appropriate funding facilities.

In this second publication we provide a selection of the most competitive deals on offer in respect of Commercial Finance for Investment and Owner Occupier mortgages. Market leading features are highlighted for easy reference. Continue reading Commercial Finance Loan Directory


BM Solutions BuytoLet rates reduced Landlord News, Latest Articles, Property News

BM Solutions BuytoLet rates have been reduced across their five and 3 year fixed rate range in line with other lenders reductions and a decrease in LIBOR.

There are also minor adjustments in the cost of some tracker rate products, but it is the cost of longer term fixed rate BuytoLets that reflect more accurately the direction the market is taking and its revised expectations for future inflation and cost of borrowing figures. BM solutions have always been a significant barometer of the industry due to their substantial market share. Product details showing the decrease in cost over the product term are: Continue reading BM Solutions BuytoLet rates reduced


BuytoLet news round up Landlord News, Latest Articles, Property News

Despite the economic uncertainty surrounding Europe BuytoLet products have remained very stable in terms of pricing to the consumer. It will be interesting to see if the Bank of England’s offer of £80 billion in cheap long term loans to the UK banking system specifically for the purpose of increasing lending will have a positive effect on BuytoLet availability and cost.

After the recent LIBOR (London Inter Bank Offered Rate) fixing scandal it is good to see this rate being reduced for buytolet borrowers. Mortgage Trust part of the Paragon group have reduced their LIBOR from 1.1% to 0.9% and Keystone mortgages who specialise in limited company, multi-let and HMO applications have reduced their LIBOR from 1.1% to 1.05% Continue reading BuytoLet news round up


Development Finance is still supported in the current market Commercial Finance, Landlord News, Latest Articles, Property News

We are witnessing a significant rise in the incidence of some banks refusal to offer new or extended terms to development loan facilities. In extreme cases, some banks are demanding early loan redemption. This often leaves the borrower with a major headache in a market where commercial lending is restricted and competitive alternatives are not immediately apparent.

There is no doubt that some banks are ‘shoring up’ their liquidity positions by not lending as broadly as they have done in the past, but there are still a good number lenders very much in the market. Continue reading Development Finance is still supported in the current market


Property Forum and News website where UK landlords and letting agents share best practice