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Stuart Phillips

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About Stuart Phillips

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  1. Yeah, a BTL broker will definitely help, there are over 75 BTL lenders so if they only have access to about ~40 they sound like they are mainly residential and thats no good when things get remotely complex. How you pitch the deal to a lender is important, but you cant control their suspicions nor their appetite and your timing is unfortunate. Lenders have a lack of cash (more complex than this, but it boils down to the same), stretched staff and everything they knew about risk over the past 10 years is now uncertain. Smaller challenger banks, building societies and lenders would be more likely to have the time to look at this objectively and as long as you meet their key criteria, they dont credit score like the big banks and so your lack of credit is less important. One thing is certain though is 6 months after getting all this done, the options open up significantly, and once you turn 21 again many more lenders become available. It will get easier. Nothing worth doing is ever easy!
  2. This is what made me question this. If you put this to the lenders as a residential then they are going to see whats up. If theres a tenant present they know it makes no sense to buy somewhere with tenants and then subject yourself to the grief of evicting them, possibly losing the rent income whilst you do and then paying a mortgage ontop. Given lenders reduced attitude to risk because of the pandemic, it wouldnt be surprising that they decline simply because it looked suspect. They are very good at spotting risk, its exactly what they pay underwriters for. To be more constructive though i would say you first need to understand why only those 2 lenders were deemed viable. There are other lenders that will do BTL to someone under 21 who is a first time buyer. They will however only lend you as much as they might do for a residential. If you are confident that the affordability aspect is fine, then there are other factors that mean other lenders were not an option, we need to know what the specific problems are. We need to expand on those and see which is the easiest to mitigate. Adding your father may bring in other issues. If hes a portfolio landlord, his age, his income etc are all a factors. Essentially your broker should be showing their rationale and helping you understand the landscape and your options. If they havent and just say "trust me", then i wouldnt trust them at all.
  3. So you started out by lying to the lender in the first place?
  4. Who's "they" in this context. The vendors or the lenders?
  5. Agree with DerekT You are not paying for the admin, anyone can bookkeep, you are paying for someone to spot problems and opportunities that you otherwise wouldnt have been aware of. This is a penny wise pound foolish kind of situation. Imagine if you assumed that you could move a personl property into a limited company down the line? Without someone flagging this and advising the costs you might face, that could have been a very costly mistake. What else dont you know? I email my accountant all the time with "can i do x?" questions and sometimes im surprised theres an opportunity to make or save money i wouldnt have dared just try on my own.
  6. I dont know. But i assume because increased risk of money laundering and fraud. Limited companies are not really that transparent because very little is actually public.
  7. As a broker, im encouraging my clients to steer away from flats, because im having a great deal of trouble with the valuations. Lenders and surveyors are not being kind, especially with new build city centre flats currently.
  8. Lenders are very specific in their requirements for limited companies and if you need mortgages this approach will make it extremely difficult to get any finance.
  9. Cheap to me too, i pay £75+vat for a pretty light touch acountant service. I'd pay more if my needs were more complex.
  10. You dont need a specialist mortgage broker, just one who understand the way HMO's work from a lender perspective: Valuations are based on what that house will sell for to the widest demographic, called a bricks and mortar valuation. A family wont care it could generate £31k. There are lenders who will consider a large HMO on its revenue, but this is at their discretion generally. They are more expensive of course, but they are out there and are names most brokers will be aware of, if not using regularly. Valuations are not what they think its worth now, but what it might be worth next year or the year beyond. HMO's are dependant on large local employers and students, and neither of those things may look the same in a year or two's time depending on how the pandemic response pans out. Just like every city centre apartment ive processed gets declined or downvalued, so too will HMO's until the landscape becomes clearer.
  11. The short answer is no, not really. What you are asking from a mortgage perspective is can you use the sale of the property as the repayment vehicle, because interest only is feasable if you have cash or assets already to that value. Where you dont then you need to rely on the fact you can sell the house to repay the debt and the lender needs to consider whrre you might go then. As a result they will limit you, broadly speaking, to about 50% - 60% LTV, will want between £150k and £250k equity in the property and will expect you to earn in excess of £75k per annum. You can do part and part, where 50% is on interest only and the other 25% is repayment, but you still need equity and income to be high enough in a lot of cases. Im also extremely reluctant to do interest only business now because my insurance costs are much higher for this business, which tells me that letigious claims companies will turn their attention to this after the end of the PPI issues, and the cost of fighting these claims can run to thousands, each time, even when watertight and not upheld. You are wise in starting at 75% so that a move to BTL in future is realistic, although tht wont leave you scope to pull money out unless the property rises in value in the near future, which wouldnt be something i would bank on right now. You could take a repayment mortgage over a very long time, 35 of 40 years to minimise the mortgage payment and save more, but the consequence is a vastly higher total cost of borrowing. Personally i dont think the saving will be significant enough to justify though. In terms of buying a BTL as a first time buyer, thats feasable so long as the mortgage you want is what the lender thinks is affordable on a residential basis as well as on a BTL basis. If you can afford a flat in Cambridge personally then you can probably afford a BTL in the NW. Once you owned one for 6 months you then revert to normal BTL rules and many more lenders open up.
  12. Back in 2010 the response was twofold: A Mortgage Guarantee scheme where the government essentially underwrote the MIG policies people used to pay thousands for themselves on high LTV mortgages. If a 95% deal defaults, the lender is only on the hook for 90% of the funds, the other 5% is covered by the government. The other was a Funding for Lending Scheme, which was more effective in my opinion where the Bank of England provided very cheap funding for lenders. Its a helpful option, and essential to ensure we keep the housing market moving, but as Julia and so many other commentators suggest, we need more homes being built and, this is the bitter pill we all need to swallow: We need to accept that house price inflation isnt sustainable and needs to level off long term, and thats a political hot potato...
  13. It just becomes a remortgage. There are limitations if you try this within 6 months of purchase, but outside that its just raising funds against an asset.
  14. Why not both? Take an interest only mortgage and you get the choice of when and how you repay that mortgage. You could take a repayment but then you are locked into that. Given that most lenders allow 10% of the outstanding balance per rolling 12 months, thats usually more than enough to completely repay a mortgage in 20-25 years. So once you have the mortgage in place you ring the lender and up the direct debit. You can always stop that for a while if you need cashflow or want to collect that cash or do something in between. Its all about flexibility.
  15. You will find it very difficult to source limited company lenders on property under 75k value im afraid. This end of the market is a bit more specialist and those lenders have always had higher thresholds. There are a few options but it wont leave you many places to move to and its not a policy i can see changing in the future.
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