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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Residential purchase and a buy-to-let
Me and my partner are purchasing a new property to live in together therefore getting a new mortgage for it. My partner owns her house outright so we are getting a buy-to-let mortgage on that property to release funds for a deposit. I own a property which we have agreed a sale on which will complete at the same time we complete everything else.
We are both now furloughed but I am still managing to pay the mortgage on the house I own. We hear from our broker that our lenders are getting twitchy about lending us the money for both the onward purchase and the buy-to-let. If they won’t lend, our purchase and sale will fall through. Is there anything else we can do?
Answer
I am sorry to hear this – it must be incredibly stressful for you. For the remortgage of your partner’s current property, lenders are usually fine to continue lending on a buy-to-let mortgage to those who are on furlough, as long as the income which they are receiving still meets their requirements – generally £25k p/a.
The residential purchase mortgage is more complicated as this has been based on your incomes (pre furlough) and as such, I am guessing you are currently receiving a lower level of income which could go on for some time yet. Some steps you can take would be to ask your broker to firm up exactly where you are in terms of the existing offers.
Consider whether you can delay completion until you are back at work (and your usual income levels have resumed thus appeasing the lenders) and lastly, ask your broker to form a backup plan. Good luck!
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Question
Valuation dilemma
I was in the process of buying a house with a buy-to-let mortgage but then the coronavirus lockdown happened. I am waiting for a valuation but my lender apparently will not accept a desk top valuation which other lenders seem to be doing. Should I just wait until the physical valuation can be done or should I start the mortgage process again and find a lender who will accept a desk top valuation?
Answer
The good news is that valuers are now back out and visiting properties, although the backlog of waiting cases is causing further delay. However, your valuation should be happening in the foreseeable, so it is probably worth just checking in with your lender to see whether they can give you an idea of when the valuation may happen, and then decide from there.
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Question
What is a portfolio landlord?
I have three buy-to-let flats and am looking to purchase a fourth. Apparently, this will make me a “portfolio” landlord and I will have to supply all sorts of financial information to the lender about my other properties and income. Can you tell me what sort of information and documents I will need to supply regarding this? For example, do I need to show my savings and investments?
Answer
You will indeed be considered a portfolio landlord if you own four mortgaged buy-to-let properties upon completion. The lenders will want to see details of your portfolio (listed, to confirm addresses, property value, rent, mortgage balance, lender name, mortgage payment), plus potentially a cashflow forecast and business plan.
Whilst the latter two may seem complicated, lenders will generally provide a template for you to complete. You could also speak to your broker if you’d like more information about these extra documents. Other than this, the underwriting and documents you need to supply will be the same as your previous applications.
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