New BTL affordability rules

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  • loanarranger
    replied
    Hi Slooky
    i think you put your finger on the issue that you didn’t have any problems in getting the Mortgages 18 plus years ago. Those were the Wild West days of Buy to Let with very few lenders fully understanding the implications of Buy to Let Mortgages. BM were like many lenders like Mortgage Express where if you had a heart beat your application was invariably accepted with little or no documentation being required. Things changed dramatically after the Credit Crunch with various lenders falling foul of their loose lending and BM restricting lending to a maximum of 3 properties. Today their criteria is much more challenging and are no longer considered a soft touch in gaining a BtL Mortgage.
    I couldn’t help but chuckle at the lack of response from the RLA broker but I will say no more.
    i am glad that you have got an extension from BM but it would be best if 3/6 months before this extension expires you seek independent advice if you are seeking to retain the properties.
    Best of luck in the future.

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  • slooky
    replied
    Originally posted by slooky View Post



    So is it reasonable to assume that my husband will leave me or die.
    Just had a thought...

    You say it is reasonable to assume the above but in that case any "what if" principle should be applied.

    What if someone had an accident or fell ill and couldn't work and pay their mortgage. If that "what if" was applied, no-one would be allowed to have a mortgage.

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  • slooky
    replied
    Hi Boletus
    I will not be home for another week I will look up the number and let you know.

    The mortgages are in my name because we were advised by our broker and the solicitors who did the leases at the time that that was the only way to get the mortgages. We also had to set up a management company. Cost us a fortune. Was never happy about it at the time.

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  • boletus
    replied
    Originally posted by slooky View Post
    So is it reasonable to assume that my husband will leave me or die.
    Sorry but it does seem a bit reasonable. There are obvious tax advantages to holding them in joint names but you have chosen not to.
    BM just want to be sure of their money with someone who has an income.


    Hi boletus - BM will still speak to people.
    That is interesting. When I tried phoning them, I went through the options and got to "are you a broker or customer?", when I answered customer, they said "speak to a broker, goodbye".
    Could you tell me which telephone number you used as they wouldn't speak to me and I'd very much like to speak to them direct.
    Last edited by boletus; 15-09-2018, 15:09 PM. Reason: spelling

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  • slooky
    replied
    Thank you for your responses. I was beginning to think no one wanted to respond!

    Originally posted by loanarranger View Post
    When an extension is sought from an existing lender or indeed a new lender , there is a term used in assessing affordability and that is called “Reasonableness or Plausibility ”
    So is it reasonable to assume that my husband will leave me or die. I thought this was harsh considering they looked at our family income when I took out the mortgages and for some reason the mortgage end date was set to my husbands 65th birthday. I find that very strange.
    The crazy thing is I can afford it and have had no problems for the past 18 years, 15 of those years with BM.

    But regardless of whether that was fair we are having a shift of financials. I have no debts anymore and our personal mortgage should be paid of within a year. We are throwing money at our BTL this year to make it look good and increasing the rents. We then aim to have 2 years with maximum profits & minimum expenditure. My children will be adults so I will not have to include them on any affordability data. I then intend to look for a re-mortgage but I would prefer a long extension with BM.
    You are correct in saying I have a good rate and yes would like to stay with BM.

    But if there is anything else you can suggest that would be great. I guess I am looking for someone to say that BM could not apply the affordability rules to me because I was already a customer.

    I did have a bad day at the time and a lot of panic but I am over it now as they did extend for 5 years.

    I am also surprised that the question has not srisen before because surely I can't be the only one in this situation.

    I would also like to know what figures they would find acceptable.

    I did speak to brokers at RLA but they could not help at the time.

    Hi boletus - BM will still speak to people. I know my parents had easily extended their mortgage the year before to my fathers 75th. This lead me to believe I would not have a problem. But maybe it was because the mortgage term was coming to an end. BM did say I should have rung earlier and not have waited 3 months before the end of the term. I did have my reasons.


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  • boletus
    replied
    Good Morning Loanarranger.

    Birmingham Midshires no longer offers mortgage products direct to customers. This includes servicing existing customers with product transfers, further advances and mainstream mortgages. To find out more about the products we offer through the intermediary channel please contact an independent financial adviser.

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  • loanarranger
    replied
    Good morning Boletus , I suspect it wasn't a product transfer but the coming to the end of its actual mortgage term. I had to read the post twice before I made my response.

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  • boletus
    replied
    How did you speak to BM about a product transfer?
    My understanding was they only deal through an intermediary.

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  • loanarranger
    replied
    Good post and worthy of a serious response.

    Whilst there is no justification in any lender acting in a hostile manner when a long standing borrower is seeking genuine advice the unfortunate fact is that irrespective of whether the loan(s) relate to Regulated or Buy to Let Mortgages a lender is entitled to have its loan repaid either from its sale or the utilisation of personal savings OR if one can afford it to arrange a Remortgage to secure a longer term mortgage facility. This scenario is playing out with many borrowers who have had Interest Only Mortgages on their primary residence without any support repayment vehicle in place to allow the for the capital to be repaid and the egg timer is running out.

    When an extension is sought from an existing lender or indeed a new lender , there is a term used in assessing affordability and that is called “Reasonableness or Plausibility ”. I.e What is the net income of the borrower/applicant and what liabilities are they subject to, credit cards, possible liability etc on a mortgage since clearly they need to be satisfied that once these commitments are discharged there is adequate monies to cover the mortgage payments in the unfortunate event of rental voids being experienced or having to pay for significant property repairs. Where it is considered that it is a high risk proposition then they do have the right to decline to assist.

    My recommendation is that you seek assistance from a qualified mortgage broker, they will establish how best to advise you and assuage your concerns over having to possibly sell your properties. There are numerous lenders who, subject to meeting their individual underwriting requirements can grant Buy to Let loans up to a borrowers 85th birthday and in a minority of instances beyond that point. Some lenders have a minimum Gross Income requirement of £25000 and some have no minimum but again both types of lender will ask for Income and Expenditure to be declared together with supporting Tax Returns showing the declaration of income from Land & Property for at least the last two years.

    Dont panic , there is normally a solution to such matters but you might find the costs of borrowing to Remortgage to be much higher than you perhaps have been paying with BM Solutions.

    Leave a comment:

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