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    No problem Boletus

    Lenders create their Business plan and the amount of completions they seek to achieve over the following twelve months, given that an application can on average take anything from two to three months to complete from application to drawdown , so if the pipeline isnt bolstered during the last three months of the previous year then they are in effect seeking to generate 12 months completions in a nine/ten month period.
    It is evident that for those lenders who have set their stalls out in respect of Buy to Let business have experienced a significant downturn in the levels of business in recent months and therefore to ensure that they kick the new year off to a flying start they try to generate as much new business applications as is possible within their funding facilities in the latter part of the current financial year hence why the rush to create funding facilities to give them a competitive edge over other lenders. Those that have been in lending for any length of time know what occurs when there is speculation/reality in interest rates increasing, I have 50 plus years and know exactly what pressures that generates.

    At the end of the day lenders are not altruistic , they seek to achieve a specific profit factor taking into account the costs of origination , administration pre and post completion so when the signs looked less positive then it is a case of go for what is available even if it might mean a reduction in profitability to secure a greater share of mortgage business for a limited period but importantly not sacrificing the quality factor.

    Hope this helps explain the rationale of what drives lenders in todays competitive market.

    Comment


      TMW has announced today a return to lending to Limited Co’s albeit on a trial basis through two distinct mortgage distributors, the spokesperson indicated that if it proved successful it would be rolled out to the intermediary market at large, in addition they are presently reviewing their policy governing HMO’s.
      This is positive news going into 2018.

      Comment


        There is an interesting article in the Daily Mail ( Money Section) today reporting on a paper published by Savills, it makes very dire predictions but if it is only 50% correct it does throw up a degree of concern for the amateur Landlord.

        Comment


          Originally posted by loanarranger View Post
          There is an interesting article in the Daily Mail ( Money Section) today reporting on a paper published by Savills, it makes very dire predictions but if it is only 50% correct it does throw up a degree of concern for the amateur Landlord.
          Are you referring to this?

          http://www.dailymail.co.uk/money/mor....html?ITO=1490

          House price growth will be cut in half by rising interest rates and concerns about Brexit over the next five years, an estate agency predicts.

          Savills reckons prices will grow by 14 per cent by 2022 — half the 28 per cent for the past five years — and that mortgage rates will double to 4 per cent as the Bank of England increases interest rates.



          Read more: http://www.thisismoney.co.uk/money/m...#ixzz4yBSWYbT5
          Follow us: @MailOnline on Twitter | DailyMail on Facebook

          Comment


            Good morning Boletus , wonderful turn of phrase. On this occasion no it isn't , if you go onto Mail on Line today , click on Money section and it is an article as indicated.Normally I too take a cynical view on such articles including the dire predictions on the Great Freeze of this coming winter , but on this occasion it is worth reading before becoming fish and chip paper tomorrow.

            Comment


              Ah! Right. Apologies, that's a lot more interesting.
              Although I think the 15.5% increase in rents over 5 years is an underestimate. I predict double that if the situation remains the same.

              Comment


                I agree with your predictions , the only exceptions to this increase will be those who are unfortunately reliant 100% on Housing Benefits and could result in even greater increases on the demands for greater social housing since the financials might not work with Landlords.

                Comment


                  I am sure that the vast majority of members & guests won’t fall into this category but given the time of the year when Father Christmas makes considerable demands upon his little helpers fund the high costs of buying presents I thought it perhaps appropriate to make a cautionary note on the perils of Pay Day Loans particularly having seen one advertiser citing an APR of over 1200%.

                  Lenders are taking a very dim view of Applications where the applicants have , for very legitimate reasons, used such facilities to get themselves over a short term funding issue but where they are completely unaware that this ranks as serious as having a CCJ registered. It is not the amount that triggers a negative approach from lenders , it is the fact that the applicants are perceived as not being able to manage their financial affairs in a responsible manner and consequently suffer the fate of being declined.

                  Even if readers themselves do not succumb to such borrowings , it might be advantageous to share these fact with anyone who they know are considering such ultra short term borrowings in order that they do not suffer a “No” because of being unaware of the ramifications.

                  Comment


                    Originally posted by loanarranger View Post
                    Lenders are taking a very dim view of Applications where the applicants have , for very legitimate reasons, used such facilities to get themselves over a short term funding issue but where they are completely unaware that this ranks as serious as having a CCJ registered. It is not the amount that triggers a negative approach from lenders , it is the fact that the applicants are perceived as not being able to manage their financial affairs in a responsible manner and consequently suffer the fate of being declined.
                    How do lenders know? Is it reflected in credit scoring or do they see it on bank statements or whatever?
                    I ask because it would seem prudent for landlords to adopt similar criteria to tenant applications.

                    Comment


                      They appear on any credit check.
                      "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

                      What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

                      Comment


                        It is on the credit insights of the 3 credit agencies and as you correctly surmise will be on the Bank Statements for the period in question.

                        As a broker acting on behalf of a new client, I ask for sight of one of the credit agency reports covering the last three years, that enables me to determine if such matters like Pay Day loans have been taken even if the periods of borrowing do not extend beyond 4 weeks on each occasion.

                        As a landlord and with consent from the prospective tenant I use as part of the assessment process a certain internet site that has three numbers. Com which provides me with a level of data which enables me to decide the degree of probability of them being poor or good tenants. Not foolproof but where someone might be reliant on part or whole on HB’s it gives an insight into how reliable they might be .

                        I pass no judgement where people feel obliged by economic necessity to use such facilities and for a number they might not ever have any aspirations of becoming a homeowner but being a private tenant certainly is if the council cannot provide such accommodation and therefore knowing about Pay Day loans is an important element of Suitability is concerned for Private Landlords.

                        Comment


                          The tactics of lenders never fail to amaze me regarding their ingenuity to secure an increase in business.

                          This morning I have received a market flyer which declared a very low 5 year Fixed rate of 3.19% for both individual and limited companies where the minimum loan is £300000. The sting in the tail is that the Completion Fee is an astronomic 3%, this to my mind is a classic case of getting the real profit from the 5 years fix upfront or with the amortisation secure a much higher APR on the overall cost of the deal.
                          Before anyone gets lured into considering such a borrowing facility extreme care be exercised.

                          Comment


                            Barclays has entered the First-Time-Buyers market for Buy-to-Lets today. Which is encouraging, but what is even better is that the applicant doesn't need to own a residential property when buying or remortgaging a buy-to-let property with the lender.

                            I am sure the affordability calculator is going to be brutally strict but more competition means better rates...hopefully..


                            Barclays is now taking buy-to-let applications from first-time buyers and non-owner occupiers. The changes mean customers no longer need to own a residential property when buying or remortgaging a buy-to-let property with the lender. The move takes place today, according to a note the lender sent to brokers. The note adds: “This change offers an …

                            Comment


                              I agree completely with your final paragraph , however the affordability matrix has always been tough and certainly less accommodating than many of the other participants within the market. As per below an extract from their web site would indicates that there could be a higher rejection rate than the norm;-
                              All applicants are required to pass an income affordability test which includes earned and rental income, income tax liability (including BTL mortgage interest relief), credit commitments including residential mortgage payment, existing and applied for BTL mortgage payment, other costs associated with the rental property, essential expenditure and living costs.

                              I personally have never been a fan of Barclays having wasted so many man hours in years gone by trying to book specific mortgage facilities for clients only to find the funding facilities had been taken up. I know that they have made improvements but like an elephant I like many qualified brokers never forget

                              Comment


                                How many have already done the following ??

                                I was reading an interesting article from a firm of solicitors relating to Mortgage Fraud and a step which one might consider taking to introduce a degree of protection against being targeted by unscrupulous persons.
                                Whilst nothing is 100% foolproof , it was suggested that individuals place an alert on the Land Registry requiring notification if an inquiry is made relating to the ownership/ title of Property particularly where there is no mortgage registered. Land Registry do not levy a charge for such registrations but if you wish to pay a sum one can require a notification when an enquiry is made from anyone other than a solicitor.
                                Has anyone else taken such a precaution?

                                Comment

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