Monday, February 20th, 2017
Many landlords and owners of investment buy to let property have historically leveraged their existing portfolio to raise further capital via a re-mortgage or secured loan, which in most instances has then been used towards the purchase of additional buy to let property.
That said, in last 12 months, the industry regulators (the Financial Conduct Authority and Prudential Regulation Authority), have introduced changes to the rules and guidance regarding the assessment of mortgages on buy to let property which has made it much more difficult for many landlords to access the capital they have in their existing portfolio. Given that each lender has their own lending criteria, these changes have been further complicated by the different interpretations placed on that guidance which means that borrowing assessments will also vary, sometimes quite dramatically.
This can be compared to the second charge mortgage market where lenders will perform a different ‘test’ on the affordability of the additional borrowing required based on factors including rental income received, any personal income the borrower may have and even their personal tax status.
Given the complexity that now surrounds both the mortgage and secured loan markets for buy to let property, consideration should now be given to both routes as a potential means of accessing the capital required. Unlike many other buy to let mortgage brokers, Caboodle Financial Services Limited can access lenders in both the mortgage and second charge mortgage markets to determine the best available option in all the circumstances.
Clearly with the many different products offered for remortgages and second charge mortgages, the rates available and fees charges can be significantly different between these two product categories. Ultimately, even if only one route is available it is still worth “crunching the numbers” and that is where a specialised broker can prove to be invaluable.
So, still not sure whether a Secured Loan is the right Buy to Let product for you? Call Caboodle Finance of Sutton Coldfield, Birmingham on 0121 308 9114 today or alternatively just click HERE to contact us via our website and one of our friendly team will be happy to help.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114