If you’ve applied for a BTL mortgage this year, then you would have seen some changes now the first part of the PRA (Prudential Regulatory Authority-part of Bank of England) directive has come in. What is quite clear is that a purchase of a lower yielding property will get a lower mortgage than last year.
All brokers initially work off sourcing systems to identify the best products that may be suitable to you. Most of the systems can’t cope with all the rental calculation changes so there are a lot of manual calculations in the background.
Many lenders have just brought in a one size fits all approach with the rental calculation whilst others consider your tax status, type of property, interest rate, term of product, revert rate (more of that later) and your personal income.
I’ve looked at lenders today for a client who wants to purchase an HMO and a single let. They’re unsure of whether to buy in personal or limited company and due to this there are a maximum of 17 (seventeen) different calculations that just two lenders have. I’ve invested heavily in calculator batteries and for readers of a certain age my slide rule might be making an appearance.
I speak on a regular basis with lenders to find out what plans they have and it’s quite clear that when Part 2 of the PRA changes come in by September there will be more paperwork for all concerned. So, make sure your portfolio is on spreadsheet or similar with details of address, lender, mortgage, monthly payment, product, rate, rent, purchase date and price, value, tenant type etc.