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Adam Hosker

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  1. Freeholders setting up leaseholds, try to get extra value with high ground rents. Enabling them to later sell the freehold for significant sums. Unfortunately for them mortgage lenders have grown wise to this issue and have stopped (in general) lending on doubling ground rents. A lot of freeholders have not caught up with the reality of the situation.
  2. If there are other people in the wings, a cash purchase may be prudant or if you can get a significant discount. Otherwise its more hassle than its worth if you are going to end up with a mortgage anyway @jamesduncan If you intend to live in the property. Remember to discuss it with an FCA Authorised Mortgage Adviser, that is Whole of Market. Such as the team at Bespoke Finance.
  3. It's not impossible. Though has some difficulties due to the funds being loaned. You should caution your uncle that it could well be longer than Six Months. Many mortgage lenders do not allow you to refinance within six months of purchase.
  4. The traditional ways are to purchase cash or with short-term lending (bridging). You outline its not feasible to do it in a Buy-to-Let Mortgage (due to ERC when refinancing) and that is true for most mortgages. Though the reason Property Investors dont do it and stick with the BTL. Is that refurbishment of property on a Buy-to-Let Mortgage is prohibited. The whole affordability is based on rent coming in to fund the mortgage payments. Not only that but renovation can effect the security and be viewed as high risk. The way Buy, Renovate, Rent, Refinance, and Repeat (BRRRR) is done is in two stages acquisition and refinance, not forgetting having cash aside for the renovation. The acquisition is usually with Bridging Finance or Cash. The refinance is on a Term Mortgage, typically with a lender that allows refinance within six months and takes a view on the new value. Many lenders will not move from the purchase price, others will do purchase price + renovation costs and others will do a new valuation. In 2020 - we also have some bridge-to-let products. Whereas before you would typically use two different lenders (for acquisition then refinance). Now we have lenders that offer both, in one package. This is useful as it saves some costs, (almost) guarantees an exit and gives you an idea of the final exit valuation.
  5. Hi Richard Virgin Money are fine but lowest market rates, for personal name 2 year fixes is a contest between TMW, Barclays, Natwest. Though not the same contenders for best "True Cost" over the two years, given fees, cashback, etc.. Your best route to get the best mortgage, rather than "best headline rates" is to talk to a Specialist BTL Mortgage Adviser. That becomes more true when you look at the surrounding criteria if that is the Property, Tenants or Yourself. Often the leading mortgage products are not available for all circumstances. As lilla suggest the current bread of online comparison sites, are dreadful.
  6. It's a regulated activity being raising finance on your home. So you should seek some personalised financial advice from a FCA Authorised Mortgage adviser. They can outline to you the risks and look at the options. Further Advance is great, typically if you are stuck with the lender on the Initial Rate with some ERC's. Though not always, especially if you are close to the end of the initial term and especially if you are on SVR. As a full remortgage could be better placed, giving you better rates on your mortgage. There are other alternatives too such as a 2nd charge loan. Where these come in often best,where the intent is to repay the loan in the short term. Lenders treat further advances differently - in general, it is less paperwork, but they may require a re-valuation and full application to check against current criteria. Unfortunately, further advance products may not be as competitive as other lenders, or the lender's remortgage products themselves. The "biggest risk" is that you are putting your home at risk to purchase a property investment, that may fail. You may loose that money in the Buy-to-Let if your plans do not come to fruition. Leaving you with a large mortgage on your residential property that you have to meet to maintain living in the home. Longer Hours, Working Longer in Life, etc..
  7. Im not sure where you heard they are becoming more common. They where very common but changes in Mortgage Interest Relief has made them rather expensive and the PRA Rental Stress Tests made them available to only the high yielding properties. Though that is not to say there is not better availability. Many years it was just one lender offering, we now have a few. You do not need Buy-to-Let Experience but you do need to be a homeowner. Though experiance is required for 85% LTV HMO Mortgages. Its not difficult to get at 85% LTV Mortgage, the main thing is making sure you have good rental income. As the stress test has to reach a larger loan amount. Perhaps - there are more lenders available now. Though you should really aim to build up 5% Deposit and get in the more competative 80% LTV space. As there is no guarantee that you or the property, will meat the criteria of the other view offering the mortgage. Leaving you trapped on the SVR (which is not low). A higher rental stress test. They want to ensure they have good security, given the higher risk. You do get lower Rental Stress Tests in a SPV than in a Personal Name. Otherwise not much difference in the general sense. I would suspect not. We have some competition in the space but most landlords avoid 85% LTV in my experience. You do have some landlords that do use it to their advantage for leveraging and building a portfolio. Though given the higher rates and product fees, even they generally aim to build at least 5% deposit by time the next remortgage comes. Otherwise your net profits will be hit by the fees and rates. We wrote an article a year or so ago about 85% LTV Buy to Let Mortgages that may answer some of your questions. The TL:DR of all these questions is that is just the same as other LTV Mortgages. Though reduced choices, higher rates and fees. You will need to have a good rent on the property to make sure the maximum loan the lender offers is 85% LTV.
  8. Mortgage Lenders do not like Freehold flats, as their is no clear way to sort shared issues. Perhaps the roof needs sorting, or a structural issue with the wall. A freehold flat would require consent of all to come together and fix it. Whereas leasehold has it written in contract that all should participate, or what percentage they should participate. There are lenders that do entertain mortgages of Freehold Flats, Bespoke Finance has done a few in its time. Its the way many units were set up. If your broker is coming up blank, then would be happy to help with the contact details in my signature. Though if you have a freehold flat, on one floor with no property or other flat attached to it. You have a freehold bungalow? no?
  9. You can work with a mortgage broker to test your requirements, a few points to remember when you do. Mortgage Product v Mortgage Product Not all mortgage products have "arrangement fees" at all, never-mind £1k. Though its not a freebie, its a trade-off with higher rates. Its not uncommon for the same lender to have two like-for-like products except in the way - one has fees and low rates, the other has no fees and higher rates. Which way to proceed depends on your circumstances. Personally I prefer to ignore fees & rates (where possible) and recommend the product with the least "total to pay" over the initial rate term. This compares both the products adding up fees, rates, etc... over say those 2 years and presenting one as the least expensive over that period. Mortgage Consolidation If you want to keep your total fees low. Obtaining 6 low-ltv mortgages at 2% each with a £1k fee can add up. Perhaps it is better to get 3 mortgages - compared these would be at higher LTV's higher rates but reduced fees. In this way you are viewing equity on your portfolio as a whole and not as individual properties. The wise property investor would too reduce the mortgages to NIL on the higher rates properties (non standard construction, hmo's, holiday-lets, etc..) Also You may find it difficult obtaining finance with just £25k borrowing. All lenders have a minimum loan amount and many are higher than £25k. You can find contact details in my signature to Buy-to-Let Specialist Mortgage Brokers where they can go through the options with you.
  10. You would typically use a short-term loan (aka bridging loan) to raise the funds to purchase your new home. The bridging loan paid off in full when you sell the original home. Many do not have that flexibility and would look to do a "chain" purchase. Where their are multiple purchases and sales, taking place at the time time.
  11. That determination is not black or white its a bit grey. Lenders implement the rules there own way. I wouldn't worry about being classed as a portfolio landlord or not. It's just a bit more paperwork that the lenders typically ask for anyway. As lenders do their checks anyway, it was one of those regulatory things that was built up and when implemented came down to not much difference. You do have lenders, that have caps of background properties (though they always had). The same applies, some ignore background BTL in a SPV and others do not.
  12. Yes (see signature) - Typical Fee is £495 but can be lower depending on whole situation. You should not be paying £1,495 @adrian b to John Charco. That's a fee that shouts they do not want your business. As you outline a lot of the market leading deals are Mortgage Adviser only.
  13. This old topic may help you - Inheriting into a LTD Company.
  14. Conveyancers are important. You just use them regularly and often change, given the mortgage lenders panel. I can see that but its not really in a brokers interest @row to recommend a crap conveyancer, they are paid on completion. In addition SRA rules outline that referral fees are highlighted on conveyancing quotes. Though they do often "recommend" crappy conveyancers, as many mortgage deals comes with "free conveyancing". Where the lender has negotiated a deal with a firm. These are notoriously terrible.
  15. They are all important in there own ways? Conveyancer perhaps least probable to require to build an ongoing relationship. You use them irregulary and often change, given the mortgage lenders panel.
  16. Loan to value (LTV) on bridging finance is 70%-75%. So on a £100k property you would need £30,000 deposit, as well as funds to renovate the property. Some may outline you can get 100% LTV Bridging Finance but that is securing the "deposit" on the equity in other properties. Which remains an option for you, if you have equity.
  17. You should talk to a mortgage adviser about your plans, each lender has different criteria. They are not fond of 3rd party giving loans to a company. Though he could be a minority shareholder, many lenders are ok with shareholders under 15% not being on mortgages / guarantor. The most common though is that parents "gift" the money to their children. Then the child putting that money into the company via a company loan / investment. It's possible but needs to be structured in a way that gives the lender confidence as per there criteria.
  18. When we do mortgages at Bespoke Finance we set the companies up for our clients. You will mainly need your personal information (and that of any other shareholder/director), an address to use for the Company and a name for the compamy. At one point it will ask you about company activities or SIC Codes, you just need to use the following: 68100 - Buying and selling of own real estate 68209 - Other letting and operating of own or leased real estate A common website for the ease of use for setting up companies is https://www.companiesmadesimple.com/ Hope this helps.... Yes you will want to set up a Bank Account as soon as possible, prior to a full mortgage application.. There are some great online banks such as Starling Bank, that you can set up within a few hours.
  19. Tenancy in common is one way to own a property with another person, including homes you rent out. The other option is a joint tenancy. Choosing how you formally own a property with others affects the tax you pay on rental profits and capital gains. A tenants in common agreement is often considered a more flexible way to own letting property than a joint tenancy. You can Split ownership of a property into unequal shares. These shares can range from 1% to 99% as long as the total shareholding comes to 100%. This enables you to save tax by altering their shares of ownership. This would allow them to give an owner paying tax at a lower rate than another a larger share of the rental profits and gains. What I would say though is that its always good to talk to an Accountant prior to making these decisions and ensuring you are moving forward in a path that is beneficial. ( P.S. "Tenancy in common" is for property owners, not private tenants. People get confused about that, just due to teminoligy.)
  20. 1. The definition of a “portfolio landlord” is someone with four or more mortgaged properties. ... Except it does not really matter. Lenders no matter the landlord size want to know about your background portfolio. 2. There is no standard rental cover with "lenders are obliged to use" though 125% at 5.5% is a good starting point. Some lenders are more flexible than others when stress testing background portfolio. 3. You should talk to a mortgage broker before making the determination it is hindering you. It may not be. 4. Yes LTD Company BTL does have Lower Rental Stress Tests than Higher Rate Taxpayers buying in personal name. So does getting 5 year Fixes. In Conculsion.... I think you are worrying a little too much about the background portfolio stress tests. Lenders do conduct these but they are not as strict as you imagine. It is also on average, so your better peforming properties can blur the issue with a single property. A good Mortgag Adviser will ask you for a portfolio spreadsheet and make sure that it is not an issue with lenders before placing a case. The team in my signature would be happy to help you Matt. Give you peace of mind.
  21. That would be interesting! I have to wonder if lenders would be happy with the arrangement. My default would be no. Except I presume if instead of "joint representation" the lender instructs own conveyancer it would be ok. Welcome @row good luck on your Buy-to-Let Journey. Properties maintining their value is always a worry, typicaly time is on your side if there is a recesssion. Though not for those who purchased at the peak, waiting for anouther could be a long wait. High End Properties & Low End Properties seem to hold there values worse in a recession.
  22. No problem @fabs The Maximum LTV on Buy-to-Let Mortgages is 85%. If im to presume the flat is a Buy-to-Let then you could obtain a mortgage of £128,350 on a value of £151,000 releaseing equity of £25,350 The £25,350 could fund the deposit on a 85% LTV Purchase of a property up to the value of £169,000. That being an example of "releaseing equity". (Not the over 55s "equity release"/"lifetime mortgage"/"home reversion plan".) Though all being said the rates on 85% LTV Buy-to-Let Mortgages are not very attractive (nor is 'leverageing' to many). You would certainly be better waiting and saving a little more so you can at least get to 80% LTV or even more competative rates down at 75% LTV.
  23. Yes - I would certainly recomend a view of the whole of the market. £599 for a limited panel research does not seem logical. When whole of market brokers are often cheaper. I'd also recomend a broker that specialises in Buy-to-Let Mortgages, not a residential broker that also does Buy-to-Let. The team in my signature @ben kershaw would be happy to help. It's a free quote so no harm in challengeing them against the limited panel broker.
  24. Have you tried JMW in Manchester or Blacks in Leeds? Your mortgage broker should be able to get you some quotes and have some existing clients that have used them for a testimonial.
  25. That's right and many do release equity from there residential property to invest in other bussiness. Though you should be aware of the risk - if you do loose your cash flow (job). It will be a harder/larger payment to make - some may offset this with Accident and Sickness Insurance given the risks their too. Their is also a risk that the investment fails and that £100k that was relativly "save" in your residential home. Keeping your mortgage payments low and giving security to your family is then lost. These are warnings a mortgage adviser will give you when releaseing money from a residential property. It's something you should concider before making the determination. As like you outline their are possatives that can come out of it too, such as diversifying and increaseing your income. The team in my post signature can help you with releaseing equity and investing in the property market.