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Stuart Phillips

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Everything posted by Stuart Phillips

  1. Yup, they should have asked. Its generally a tick box on a lender affordability calculator, or has to be taken into account like a personal loan premium and will affect affordability.
  2. I think the main metric for BTL lenders is debt to income, rather than specific amounts of personal debt. Personal loans are not taken directly into account when assessing affordability, however ive had a few BTL mortgages declined because the client had very high levels in comparisson to their stated income. Its not a common issue though.
  3. There are pledges to ban ground rents altogether: https://www.which.co.uk/news/2021/01/leasehold-scandal-government-pledges-to-make-it-cheaper-to-extend-leases-and-cut-ground-rents/ The reason its a problem for lenders is that once a ground rent passes a certain threshold (£250 in the UK, £1000 in Greater London) its considered part of the AST rules. That means that if you dont to pay the ground rent for 2 consecutive periods the freeholder can evict you like a tenant. That means the lender loses their security. Whilst its very unlikley someone would lose a home over a £500 bill, lenders
  4. I believe Interbay Commercial dont have a maximum number of shareholders, but thats the only one i know of, and i havent put anything like this through them to know what else they might ask.
  5. I think the only real option is a BTL remortgage with capital raising. You can get flexible deals that dont tie you to 2 or 5 years. That way you can refinance to a resi again or sell without penalty. You might need to do that after you have moved though to avoid it being considered a Let to Buy where an onward purchase is often (not always) required. It is dissapointing, but if you released equity first and were then declined for consent to let you would be in a tricky position. Without consent the mortgage contract is invalidated and that at best bars you from further borrowing with tha
  6. I never understand this. As a rule this kind of practice gets you kicked off lender panels. Halifax used to be the go to because their DIP was lightening quick and a soft search. They dont want to see millions of DIP's that never turn into actual business though, and will contact brokers who are doing this with a warning. Brokers used it as a litmus test instead of getting your actual credit report and checking it for adverse, but relly "excessive credit checks" would be more than a few, you can afford to shop about a bit without it looking desperate. That would further set alarm bell
  7. Yeah, i dont really see an issue with this in principle. Consent to let is designed for this very purpose, a short term let on a home due to relocation or inability to sell. I think you would want to be transparent about the intent to let in the further advance application because some lenders may not like the two together, you wouldnt want to complete one only to find it invalidates you for the other. As long as your present lender is happy though, i cant see a new lender having an issue with your situation, although some will want you to be an "owner occupier" as opposed to just an "own
  8. Anything under 100 years may start to become a problem for lenders, but it gives you enough time to figure that out for now.
  9. You are double counting the fee. Added to the balance, and then added again...
  10. @Adam Hosker I wouldnt suggest a PT because its less work for me, ive shown my working and the reason i'd make that recommendation. I do that work regardless of whether i was even getting the business or not. Its a better outcome for the client on the basis that the £200 saving will be eaten by compound interest, exit/admin fees (accord - £90) and funds transfer fees (2x £35) easily, without even factoring a broker fee. The fact its also the simplest option is a bonus. Chris is right to question the advice, because i dont think that broker has been transparent or even got the maths right,
  11. When brokers use their mortgage sourcing software there are two ways of dealing with fees. You either tick a box to add them to the loan and then work out total cost over 5 years, or you add the fees onto the total cost. You'd need to know which approach they take, personally i think the latter should be the correct option in every case. The former approach does ignore those fees stacking up because on a 25 year loan, you are only factoring about 20% of the effect of the fee and thats without considering compound interest over the term too. You can still add the fee, but you know the inte
  12. Luckily, on that calculation above, the rent you need for 75% of that is £623 a month... That might be helpful when negotiating because its only going to work for limited company BTL buyers, anyone buying in a personal name would need £722 rent to get a 75% mortgage.
  13. Its not surprising the tenants are not cooperating as much as you would like, they know the terms are likely to change on them and they may face having to find an extra £225 a month or move house and im sure they dont want any extra visitors than is absolutely nessasary. Lenders will take the lessor of the market rent or the actual rent, so you might find it affects what you can borrow. You are going to be limited on how much you can increase the rent if its on a rolling contract though. Without knowing the numbers (rental income and mortgage amount you need) i cant say if it will limit y
  14. Almost all BTL loans are for a fixed period. Those that are flexible specify in the criteria they are not to be used for property flips like this. If they think thats what you are doing they will decline. What you need is a bridge. This brings some advantages, but its expensive, and the margins might not justify it. Bridging allows you to get the funds quickly, on property thats maybe not suitable for a mortgage on the basis that you will sell within a short space of time, 3-12 months. The sale is what they care about so as long as there are property sales in the area for the amount that
  15. I would email @Mark Rocks if its something to do with what you are allowed to post.
  16. There are very few limited company lenders that dont need a personal guarantee. At the moment just one apparently. @Adam Hosker is the man to ask about that one.
  17. Worth mentioning that you might see conditions or articles suggesting that you cant remortgage a property within 6 months of taking ownership, however thats something that usually waived where the properties are inherited.
  18. Yeah, nothing stopping you gifting a deposit, its pretty much expected these days. You will need to sign a letter saying that you will have no stake in the property, its not a loan and there are no repayment terms. Theres nothing stopping your partner 'gifting' that back to you at some point, but you will have no formal or legal recourse. The other factor might be that a lender will assume you will reside with him, but not being on the mortgage or title, means you will be considered a dependant, potentially reducing the amount he can borrow. I think suggesting to a lender that you wont li
  19. So a few key things you should be aware of: Porting is a brand new application, you start from scratch, new affordability assesment, credit check, valuation, underwriting etc. A lot of people assume its just moving an existing mortgage over with less checks. Its not, you just get to port the rate and avoid an ERC. You will need to remortgage the existing property to a new lender in order to redeem the old Santander mortgage. This means you cant go down the consent to let route which is often easier these days if you have cash on hand. You wont be able to let to a family mem
  20. For starters this wont fly with a BTL lender. If it were a well established business letting to employees, education (university housing for visiting lecturers etc), or housing association then maybe, otherwise they would want to know more, and would decline the scenario above. It would also be limited to 12 AST months typically. Secondly, this is exactly what im discussing. You have to ask yourself why they dont buy the property themselves if they can make £1200 a month? The answer is, they dont have the capital, and that should set alarm bells ringing. Its zero risk for them. You've see
  21. So my issue with Rent 2 Rent is that its subletting. You rent to someone, who in turn rents to others. Now thats not going to be a family of four, thats going to be essentially a HMO. Different people sharing ameneties means no one is actually responsible for the whole house. Hence the reason there is more regulation around HMO's. So imagine a scenario. Someone dies of carbon monoxide poisoning, or in a fire. Who's responsible for that? You are, you'll be the one in the dock explaining why your 4 bed semi was rented to 5 people who's names you might not know, and why the alarms were not t
  22. Rent 2 Rent is a grey area at best. Personally i think it should be illegal and if you are serious about property you shouldnt touch it with a barge pole. Any client who mentions it gets deleted from my phone straight away...
  23. Its very hard to say. I think there are two big factors that will influence this though: Cladding scandal. At present there are a large number of flats that are unmortgageable, and potentially leaseholders will get saddled with huge bills they cannot afford. If the current vote passes in the Lords, what happens to those properties? Hybrid working. There are some very large companies saying that people will continue to be able to work from home and the office, we might see the main benefit of inner city living dissapear. If you only need commute 2 days a week, then that really changes
  24. Lenders across the board have been pretty quick these days. It wouldnt surprise me at all at that LTV. Its really dependant on how simple the income is with Santander though. If its all basic, no furlough and in an industry not affected by covid, then yeah, it might fly through. Dont tell your vendors/agents that though, better to under promise, over deliver than the reverse, id always add a bit of extra time for the unknown. No one complains when you exceed expectations!
  25. Will do as soon as they release an Android app! 🙄
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