BTL loan with bad credit issue - please help

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    BTL loan with bad credit issue - please help

    Hello, I am new to the forum and would appreciate your help.

    Back in November 2018 we had a loss in the family and it affected me. I lost interest in most things and neglected my responsibilities. I have a minor bank account which I use mainly as backup for Paypal payments on eBay and other online purchases. I was unaware that the account had become overdrawn by approx £100 I would have replenished the account otherwise. This went on for three months before I topped up the account. Now I have 3 strikes and I am unable to get a BTL loan to purchase a flat in London.

    The asking / agreed price is £540,000 and I am ready to make downpayment of £350,000

    So far no lenders have been accomodating and I am quite desperate to buy the flat, which brings a rental of £1600 pcm

    Any advice or help or if anyone knows of lenders who may be accomodating, I would be grateful, thank you kindly.

    #2
    I can’t give any advice about this but it might be helpful if you say what you’ve done so far to try and obtain the loan so that people can tell you what the next step should be , have you spoken to a broker or just been to a couple of banks?

    Comment


      #3
      Thank you for your reply. I went through two different brokers and both coud not secure me a BTL loan. We contacted the lenders to explain the circumstances behind my default and they still declined. I have never ever defaulted on any loan or mortgage payment in my life, very unfair.

      Comment


        #4
        What is the actual amount of the Default and when was it listed , When was the default satisfied.
        you make mention of a minor bank account , does your salary get credited to it or is this paid into another account.
        An important question is do you run your bank accounts continuously in credit .

        As a broker I would say that you made a mistake in going through two brokers , one broker armed with your financial information would have been sufficient to research the available options and without lenders making credit searches against you irrespective of whether by doing so they leave a soft or hard footprint on your Credit Insight, as a consequence one has to disclose to lenders that you have been declined by more than one lender. Can you advise how many lenders were approached and which ones ?

        Are you a Homeowner with or without a mortgage.

        There are a minority of lenders in the BtL sector who might consider satisfied defaults within 3 years of being registered but the above questions are fundamental in establishing what if any options might be available to you.

        Comment


          #5
          A great example of how the current system of algorithm based banking is defective. In the old days you wouild have sat in from of the village bank manager who would have assessed risk.

          Now they give massive loans to all sorts of ultra high risk folk who have no history of managing money properly and there is no sense at all. It has already led to one major financial crisis but that's only the start -- we are looking at mass loan defaults and high interest rates in the decades ahead.

          Comment


            #6
            Price £540k, rent £1,600 pcm... Keep looking for a better property.
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

            Comment


              #7
              loanarranger,

              The amount of the default was approx £130 and I credited the said bank account in February with more than the required to return it back into credit. My salary is paid into a different bank account. My bank accounts are always run in credit. I never default on payments, until this one.

              I am not sure how many lenders were approached and which ones now, but when the first broker could not secure a loan, I was forced to consider a different one.

              i am a home owner and with a mortgage. I also own a BTL flat in central London with a BTL loan on it. I have never defaulted on either.

              Thank you for your help, I appreciate it.

              Comment


                #8
                With your permission and without obligation I am quite happy to discuss your situation with lenders whose criteria might accommodate such an application. I cannot guarantee anything but I am prepared to help .
                Might I suggest that for your own point of reference thatyou actually ask these brokerages as to whom they submitted your application alternatively you can get an updated Credit Insight from either Equifax or Experian the two key credit agencies who are used by the vast majority of lenders.

                Comment


                  #9
                  Please and kindly proceed and I am grateful for any help you can provide. I have Equifax account and can obtain a report any time you would want me to do so. I will private message you my contact details. I am not putting my hopes high and I appreciate your good efforts, thank you.

                  Comment


                    #10
                    "Which Report" have produced a report for persons with bad credit rating to get a mortgage. : Difficult.

                    https://www.which.co.uk/money/mortga...s-ay2m91n0u9mu

                    Comment


                      #11
                      The analysis of the lenders was done in 2019 and unfortunately for some their criteria has changed , however much depends on when the credit issue arose , there is indeed greater tolerance where the issue is historic ( 3 years plus and satisfied at least 12 months ago) , where it is more recent then thresholds come into play in terms of the debt.
                      For many lenders their capacity for accepting adverse credit applications is governed by the “Warehousing Agreements” which are put in place by the Institutional Funders and even conventional lenders have constraints placed upon them insofar as the amount & percentage of total lending.
                      A good broker armed with all the material facts and financial data should be able to filter out the definite No’s to those that on paper have criteria that accommodates the type of adverse etc which the enquiry has.
                      I am sure that a positive outcome might become available to the OP.

                      Comment


                        #12
                        I was thinking that someone who is worth £350,000 should not held back by a £100 debt for 3 months .
                        Could OP apply to the local magistrates court for removal of £100 debt record ?

                        Comment


                          #13
                          The removal of a Default is at discretion of the lender given that such matters do not reach the Court , whereas if it had then a County Court Summons would have been issued but expunged from the records if paid before the 28 day grace period. Had the issue arisen from a problem with a telecommunication firm lenders are normally inclined to ignore such matters.

                          Comment


                            #14
                            Also theartfullodger said keep looking for better property. He did not think this property was priced to give good enough yield .

                            Paying £540K for annual rent of £19,200 is only 3.5% gross yield.

                            Comment


                              #15
                              That is very true but a reflection of the London Market. I have a 2 bed Penthouse close to Docklands , value before the issues of cladding etc £520000 with rent of £1750 per month. Capital appreciation has been good , but the yield is fair but accepted as not brilliant.

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