Have Underwriter rules on BTL loans changed in last 2 weeks?

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    Have Underwriter rules on BTL loans changed in last 2 weeks?

    Without naming names about the lender:

    Had a BTL interest-only mortgage offered in principle, they did credit checks etc and were happy.
    2 weeks ago I sent off all the forms and docs for a BTL loan with about 40% deposit so say 60% LTV.
    Followed up with a phone call to check if they were happy with all the info - yes.
    Surveyor is now scheduled by the lender.

    Then, after 2 weeks new forms arrive in the post
    a) wanting fulsome details and supporting docs on how we will pay off the principle at end of the mortgage term (which will complete before I retire from my day job), and
    b) wanting evidence that both partners in the mortgage have an income source (outside of the obvious BTL rental income) to pay the interest-only BTL mortgage.

    Suddenly all the boxes that I thought were ticked on this deal are apparently not.
    I'm scrambling to provide all this new stuff but the thought occurred to me - has something changed?

    Have BTL mortgage rules imposed by the underwriters tightened up sharply in the last few weeks, behind the scenes? Be interesting to see if anyone else has this feeling.

    #2
    There have been some minor tweeks to underwriting criteria but those indicated in your note seem a tad excessive , certainly when it comes to paying off the mortgage at the end of the mortgage term. Certainly lenders now want to see visible evidence of your primary income , not to see that you can afford the loan but as a measure of noting your financial income. Some lenders have dispensed with the need to earn say £25000 but if you say you have an income of £20000 then you have to prove it and that means having to produce your SA302 to demonstrate income and confirmation that the rent has been fully declared.
    To help you further can you indicate which lender you are dealing with.

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      #3
      I had already supplied pay slips to prove current income.
      The lender says there have been some changes/tightening on BTL (I was surprised to hear)
      But it turns out that the underwriter had only just got around to my file, underwriters are very busy it seems.
      It took a phone call to establish that not all the info listed is actually needed.
      However, there is after all a period of loan term I'd overlooked, beyond my currently planned retirement age. So they want proof of the repayment vehicle. It was the underwriter who picked up on this.
      Maybe not as bad as I thought then but the tardy response of the underwriter means I'm now rushing around getting new paperwork.

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        #4
        JerzyBalowski welcome to the world of procuring mortgage finance: much depends on the underwriters and the level of expertise: until the Credit Crunch the majority of lenders enjoyed the luxury of having very experienced Underwriters , sadly and in the interests of cost savings many were made redundant and those that were subsequently recruited have a big learning curve , in the meantime , service is slow , quirky underwriting decisions are made and worst of all it is nigh impossible to speak to the actual underwriters , having instead to communicate with well meaning call centre staff ( I often ask if they belong to Nev's Call Centre (Recently on TV) who can only communicate what is on the computer screen.

        Best wishes and hope the funding comes through in time

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