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Getting a mortgage on a UK visa

14th February 2024

By Alex Walker

Getting a mortgage on a UK visa

This article will be of interest to anybody seeking to get a mortgage whilst working on a UK visa.
Mortgage lenders can be very picky. Therefore, it’s understandable why many lenders don’t wish to lend to people who might need to leave the country in a few years.

However, at least one lender takes a different view. It’s a fairly pragmatic approach because anybody taking out a mortgage today could leave the country in two years. At that point they would probably sell their house or remortgage it onto a buy to let mortgage. The important factor is that the borrower can reasonably afford the mortgage for the time they have it

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90% mortgage on a UK visa

Bear in mind that lenders criteria changes but, at the time of writing, there are offering up to 90% loan to value. The LTV reduces depending on the loan amount as follows:

  • Up to 90% LTV available on loan amounts up to £400,000
  • Up to 80% LTV available on loan amounts above £400,000 and up to £750,000
  • Up to 75% LTV available on loan amounts above £750,000 and up to £1 million

This will be subject to change but the point is, it’s worth checking what products are available for people looking to get a mortgage on a UK visa

What type of visa?

Currently this lender is looking for borrowers on a skilled worker visa. This could be a Tier 2 visa, a spousal visa or a British national overseas visa.
If getting a mortgage on a Tier 2 visa the crucial point currently is that there is still two years left to run when you apply.

Mortgage on a UK visa even with quirky circumstances

The particular lender considering this at the moment is a very well established Building Society.
Within their lending appetite they are very used to looking at quirky scenarios such as applicants on probation, shared ownership and other less straightforward applications.
Whilst they aren’t keen on poor credit, if it’s historic it can be considered.

Important – lenders mortgage criteria changes so always get in touch to find out the latest situation



    Find a mortgage

    Enter some details and we’ll compare thousands of mortgage plans – this will NOT affect your credit rating.

    How much you would like to borrow?

    £

    Type in the box for larger amounts

    For how long?

    yrs

    Use the slider or type into the box

    Do you own property in the UK?

    About you...

    Your name:

    Your forename:

    Your surname:

    Your email address:

    Your phone number:

    Notes...


    More than 50% of borrowers receive offers better than our representative examples. The %APR rate you will be offered is dependent on your personal circumstances.
    Mortgages and Remortgages secured on land
    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
    By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

    Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

    More than 50% of borrowers receive offers better than our representative examples

    The %APR rate you will be offered is dependent on your personal circumstances.

    Mortgages and Remortgages

    Representative example

    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

    Secured / Second Charge Loans

    Representative example

    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

    Unsecured Loans

    Representative example

    Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


    THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

    REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


    Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
    Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

    Authorised and regulated by the Financial Conduct Authority – Number 681423
    The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

    Website www.promisemoney.co.uk

    Financing for Property Conversions and Extensions – Flats, serviced accom’, HMO’s, B&B’s etc

    2nd February 2024

    By Alex Walker

    YouTube player

    Financing Property Conversions and Extensions : Key Considerations and Strategies

    In today’s property investment landscape, property conversions & extensions are creating quite a buzz. If you’re new to this domain, it’s essential to understand the key considerations before delving into financing property conversions. This article and video will shed light on the factors you should keep in mind to ensure your project’s success.

    Profitability First

    The first and foremost step is to determine the profitability of your project. Don’t forget to include the cost of financing in your profit calculations. If the financing costs eat up a significant portion of your profit, your project might not be viable. Lenders will also assess the project’s potential profitability, so ensure your numbers align. Getting finance on a project which the lender feels is unprofitable will be very difficult.

    Types of Property Conversions and Extensions

    Property conversions encompass various possibilities, including:

    • Residential Conversions: This involves converting commercial spaces into residential properties or extending existing homes.
    • Hospitality to Residential: Transitioning a bed and breakfast or other hospitality property into serviced accommodations or flats
    • Commercial to residential or mixed use: an example could be converting a pub to an office / shop on the ground floor with flats above.

    It’s essential to clarify the type of conversion you’re planning, and the elements of commercial / residential use as this will affect the financing options available to you.

    Key Considerations for Financing Property Conversions

    When seeking financing for a property conversion, certain key considerations must be addressed:

    1. Property Value and Equity: Determine the property’s current value and the cash you’re willing to invest.
    2. Project Costs: Calculate the costs associated with the conversion, including renovation and construction expenses.
    3. Projected Property Value: What will the property be worth after the conversion is complete?
    4. Available Cash: Assess how much cash you have on hand to contribute to the project and when .
    5. Exit Strategy: Determine whether you plan to sell the property or retain it for rental income. Lenders assess the viability of your exit strategy.
    6. Credit history: this is more important if your exit is refinance – we need to evidence there is a lender prepared to offer your terms taking in to consideration and poor credit.

    Experience Matters

    Your experience level plays a crucial role in the financing process. Lenders are more inclined to work with individuals who have relevant experience. The larger the project, the more experience lenders typically require. If you’re new to property conversions, lenders may be more cautious. However, if you have experience in buy-to-let or smaller renovations, it demonstrates better competence to manage similar projects.

    Who Will Manage the Project?

    Another factor lenders consider is project management. Are you planning to oversee the project yourself or will you hire a contracts manager? Your choice impacts the lender’s confidence in the project’s success.

    Exploring Financing Options for Property Conversions and Extensions

    Property conversions are currently making waves in the real estate market. As this trend gains momentum, it’s crucial to understand the full spectrum of financing options available to ensure the success of your conversion project. In this article, we will delve into the intricacies of various financing methods and provide you with a detailed overview of each.

    1. Bridging Finance: A Versatile Solution

    Bridging finance remains a versatile choice for property conversions. However, its suitability depends on the extent of cash you are willing to inject into the project. Within the realm of bridging finance, there are various nuances:

    Standard Bridging: This is the traditional approach, where you secure a bridging loan to acquire the property.

    Heavy Refurbishment Bridging: In this scenario, your bridging loan not only covers the property purchase but also includes a substantial chunk of funds dedicated to renovation or refurbishment work. This method has the advantage of streamlining the process, eliminating the need for multiple survey visits and continuous oversight.

    Staged Development Bridging: When your project requires a gradual, phased approach due to limited cashflow, staged development bridging can be the solution. Lenders release funds in stages as the project progresses. This allows you to complete portions of the project and increase property value before drawing down more finance. However, lenders will carefully monitor each stage, ensuring that you meet milestones.

    2. Offering additional security:

    Leveraging equity from other properties is another financing avenue for property conversions. This can be particularly valuable if you are short on available cash. Different options to consider include:

    Offering your bridging / development lender a charge secured on other property you own. Most prefer a first charge so there needs to be no mortgage in place. However some will take a second charge up to 60/65% of the property value. Therefore any existing mortgage needs to be at a far lower LTV to make this viable and worthwhile.

    Secured Loans on Residential Properties: You can secure a loan against your primary residence or other residential properties that you own. often lending can be offered at higher LTV’s than bridging or development finance, therefore releasing more cash. This chunk of cash can be used to bolster your conversion project.

    Secured Loans on Commercial Properties: While securing loans against commercial properties is possible, it’s essential to note that the options in this category are somewhat limited and often come with higher costs. Nevertheless, this avenue is worth exploring if it suits your situation.

    Secured loans can serve as supplementary funds, distinct from your primary development financing. Therefore used for virtually any purpose and with less oversight. This is often a preference as it gives the property owner more control

    3. Remortgaging: Unlocking Equity in Existing Properties

    In some cases, you may opt for remortgaging existing properties to access additional funds for your conversion project. This approach involves refinancing your properties to release equity and cash. Like taking out a secured loan this gives you cash flow and more control. However, it’s important to weigh the costs associated with re-mortgaging against the benefits. always speak to a mortgage adviser who also understands bridging and development

    A Holistic Approach to Funding Your Property Conversion or Extension Project

    The choice of financing method will be heavily influenced by the amount of cash you can personally invest and the specifics of your project. Evaluating these financing options in detail, along with your available capital, will help you make an informed decision. The key takeaway is to ensure that your chosen financing method aligns with your project’s unique requirements and maximizes its potential for success.

    Focus on Profit and Presentation

    In summary, a successful property conversion project hinges on profitability, experience, security and presentation. Ensure that your calculations include all financial aspects, including financing costs. The more professional and prepared you appear to lenders, the better your chances of securing financing.

    Remember, a profitable project is not only good for you but also for the lenders. They are more likely to support ventures that are likely to succeed. Property conversions continue to gain traction in the market, and being well-prepared can set you on a path to success.

    For more in-depth information on bridging or development finance, be sure to check out our YouTube channel or find out more on our website.



      Find a commercial loan

      Enter some details and we’ll compare thousands of loan plans – this will NOT affect your credit rating.

      How much you would like to borrow?

      £

      Type in the box for larger amounts

      For how long?

      yrs

      Use the slider or type into the box

      Do you own property in the UK?

      About you...

      Your name:

      Your forename:

      Your surname:

      Your email address:

      Your phone number:

      Notes...


      By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

      Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

      More than 50% of borrowers receive offers better than our representative examples

      The %APR rate you will be offered is dependent on your personal circumstances.

      Mortgages and Remortgages

      Representative example

      Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

      Secured / Second Charge Loans

      Representative example

      Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

      Unsecured Loans

      Representative example

      Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


      THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

      REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


      Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
      Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

      Authorised and regulated by the Financial Conduct Authority – Number 681423
      The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

      Website www.promisemoney.co.uk

      Borrow Against 100% Of Goodwill – Larger Commercial Loans And Lower Rates

      4th January 2024

      By Alex Walker

      In the realm of commercial property investment, there exists a game-changing financial product that many entrepreneurs and property investors are yet to fully grasp. Today, we will delve into the intricacies of a remarkable offering that has the power to transform the landscape for businesses with substantial goodwill, a concept often overlooked by mainstream lenders.

      YouTube player

      Understanding the Significance of Goodwill

      Goodwill, in a business context, refers to the intangible value attributed to a company due to its reputation, customer base, and overall standing in the market. Also it’s profits. Traditional lending institutions usually disregard this element when evaluating a property’s worth. However, there are scenarios where businesses possess significant goodwill, elevating their overall value. Imagine acquiring a corner shop for £300,000, with an additional £100,000 in goodwill. Typically, lenders would only consider the property’s physical value. But what if you could borrow against both the property and its goodwill, effectively increasing your borrowing potential?

      Real-World Scenarios

      Consider a thriving restaurant valued at £400,000, with a goodwill value of £200,000 due to its exceptional success and income generating capability. Instead of borrowing against the standard £400,000, this innovative financing solution allows borrowing against the combined value of £600,000. At a standard 75% loan-to-value ratio, this translates to an additional £150,000 in borrowing capacity. The impact on investment properties is equally remarkable. Even a vacant property with a strong lease can significantly benefit from this approach. While most lenders evaluate based on vacant possession, this unique solution recognises the income-generating potential of leases, often leading to higher valuations.

      Unveiling the Game-Changing Lender

      Recently, a pioneering lender emerged, recognizing the value of goodwill in commercial properties. Unlike traditional lenders, this institution incorporates goodwill into its assessments. An enlightening example showcases a property valued at £490,000, with £265,000 attributed to goodwill. Conventional lenders offered £168,000, reflecting 75% of the bricks and mortar value. In contrast, this innovative lender extended a staggering £343,000, nearly double the amount, at a lower interest rate. This substantial financial boost, coupled with reduced interest rates, underscores the immense potential of this financing avenue.

      The Unique Advantages of Goodwill

      What makes this product truly extraordinary is its affordability calculations, competitive interest rates, and, most importantly, the ability to secure significantly higher amounts of funding. Affordability and loan-to-value considerations align favorably for borrowers, resulting in more substantial financial support. In essence, borrowers require a far lower deposit, making ambitious property investments within reach or cover additional costs such as stamp duty.

      Embracing the Future of Commercial Property Financing

      In conclusion, this financing solution offers a lifeline to businesses and investors with substantial goodwill. Whether you operate a corner shop, a successful restaurant, or own commercial investment properties, this option unlocks unparalleled financial potential. Its ability to bridge the gap between tangible assets and intangible value sets a new standard in commercial property financing. As awareness spreads, more businesses are poised to benefit, propelling them toward greater success. Don’t miss out on this financial revolution. Explore the possibilities, understand the advantages, and seize the opportunity to transform your commercial property ventures. For more information you can explore our website ,YouTube channel, or contact us by calling 01902 585020 today!



        Find a commercial loan

        Enter some details and we’ll compare thousands of loan plans – this will NOT affect your credit rating.

        How much you would like to borrow?

        £

        Type in the box for larger amounts

        For how long?

        yrs

        Use the slider or type into the box

        Do you own property in the UK?

        About you...

        Your name:

        Your forename:

        Your surname:

        Your email address:

        Your phone number:

        Notes...


        By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

        Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

        More than 50% of borrowers receive offers better than our representative examples

        The %APR rate you will be offered is dependent on your personal circumstances.

        Mortgages and Remortgages

        Representative example

        Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

        Secured / Second Charge Loans

        Representative example

        Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

        Unsecured Loans

        Representative example

        Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


        THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

        REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


        Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
        Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

        Authorised and regulated by the Financial Conduct Authority – Number 681423
        The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

        Website www.promisemoney.co.uk

        100% Bridging – Borrow 100% Of The Purchase Price

        21st November 2023

        By Alex Walker

        In the realm of property purchasing, the prospect of borrowing the entire purchase price might sound like a distant dream for most. Typically, lenders are inclined to extend only 75% of the property’s value, which is usually determined by the purchase price. However, there are intriguing exceptions to this norm that savvy buyers can explore. This article delves into the world of bridging finance and sheds light on the possibilities of 100% bridging and acquiring finance for a property at 100% of its purchase price.

        YouTube player

        Understanding the Basics of 100% Bridging:

        Conventionally, lenders adhere to a strict policy, limiting the loan amount to 75% of the property’s appraised value, often corresponding with the purchase price. But here’s where the game changes: genuine undervalue purchases open the door to a unique opportunity. If you stumble upon a property priced significantly below its market value, owing to circumstances like being a sitting tenant or a family-related deal that isn’t classified as a gifted deposit, some lenders might consider offering you a loan equivalent to the entire purchase price.

        A Real-Life Scenario:

        To illustrate this point, consider a recent case where a buyer agreed to purchase a partially completed property. The original builder had abandoned the project due to financial constraints and lack of enthusiasm. The prospective buyer, seeing potential in the unfinished property, agreed on a purchase price considerably lower than its estimated market value, approximately £200,000. With a legal agreement in place, he invested his time, effort, and money to complete the construction, significantly enhancing the property’s value to around £300,000. When it came time to secure the purchase, the buyer managed to secure a loan amounting to 75% of the increased value, allowing him to purchase the property without investing any of his own funds.

        The Intricacies of 100% Bridging Loans:

        It’s essential to understand that bridging loans, in general, operate differently from traditional mortgages. Typically, the interest on these loans is not serviced monthly but instead added to the loan amount, often referred to as rolled-up interest. In the aforementioned case, the buyer didn’t need to cover the interest separately; it was incorporated into the loan. For those unfamiliar with this concept, see our guide and video on rolled up and serviced interest on bridging finance.

        Navigating Regulations:

        However, it’s crucial to note that such opportunities aren’t without constraints. If the property you intend to purchase is meant for personal use, falling under the category of a residential property, regulations tighten. The Financial Conduct Authority (FCA) steps in, making the lending landscape more regulated. While lenders might still consider purchases below market value, securing 100% of the purchase price becomes less common in the residential market. In such cases, lenders are more inclined to offer loans ranging from 70% to 90% of the purchase price and 75% of the property’s valuation. Read about Regulated Bridging.

        Strategic Considerations:

        Potential buyers should not dismiss properties with prices below market value outright. Instead, it’s wise to explore creative ways to structure these deals. While 100% financing might not be the standard, opportunities to secure loans above the purchase price are still feasible. Understanding the intricacies of bridging finance, seeking expert advice, and exploring unconventional deals can pave the way for a successful property purchase. However make sure you have a well thought out and reliable exit to ensure you can pay the loan off. Check out our guide to bridging exit strategies.

        Conclusion:

        While 100% property financing might not be the norm, there are strategic avenues within the realm of bridging finance that resourceful buyers can navigate. By grasping the nuances of undervalue purchases and leveraging expert guidance, aspiring homeowners and investors can unlock unique opportunities in the property market. For more detailed information, feel free to find more pages on our website or explore our comprehensive range of educational videos on bridging finance available on YouTube. Don’t hesitate to reach out if you have further queries. Happy house hunting!



          Find a bridging loan

          Enter some details and we’ll compare thousands of loan plans – this will NOT affect your credit rating.

          How much you would like to borrow?

          £

          Type in the box for larger amounts

          For how long?

          mnths

          Use the slider or type into the box

          Do you own property in the UK?

          About you...

          Your name:

          Your forename:

          Your surname:

          Your email address:

          Your phone number:

          Notes...


          By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

          Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

          More than 50% of borrowers receive offers better than our representative examples

          The %APR rate you will be offered is dependent on your personal circumstances.

          Mortgages and Remortgages

          Representative example

          Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

          Secured / Second Charge Loans

          Representative example

          Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

          Unsecured Loans

          Representative example

          Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


          THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

          REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


          Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
          Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

          Authorised and regulated by the Financial Conduct Authority – Number 681423
          The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

          Website www.promisemoney.co.uk

          Secured Loans for Debt Consolidation

          15th November 2023

          By Alex Walker

          YouTube player

          Secured loans for debt consolidation are very important this year.

          Video transcription summary – this is not personal advice. Always speak to an adviser.

          Secured loans for debt consolidation have regularly been used by homeowners for over the 40 years.

          We are currently inundated with enquiries from people saying things like “my outgoings are going up, my mortgage rate’s gone up, my household expenses have gone up. I’ve got a lot of my credit at a high rate. I want to consolidate my debts and reduce my outgoings”.

          Using secured loans for debt consolidation is a common solution. They are particularly helpful because people can borrow over a longer term which reduces their outgoings. They can also often borrow at a lower rate which reduces their outgoings further.

          However, you have to think about the consequences of borrowing over a longer term. It means you’re paying the loans back for a longer term and therefore you might pay more interest in in total. Additionally, if paying off unsecured debt, you’re securing it against your home which is different to unsecured, as it can put your home at risk if you don’t keep up the repayments.

          When to consider secured loans for debt consolidation

          Comparing a secured loans with a remortgage

          Secured loans are a great product and a lot of people apply for them. However, careful advice is needed from a professional secured loan and mortgage adviser who can compare the market for both secured loans and mortgages side by side.

          Keeping your existing mortgage deal or avoiding early repayments charges

          Secured loans can be really important for people who need to raise cash but they don’t want to remortgage because they want to keep their existing rates. You may love the deal you have and if on a fixed / capped / tracker rate for an initial term, you may incur penalties if you remortgage.

          Change of circumstances means reduced choice or remortgage products

          Borrowers who’ve got poor credit usually can’t raise cash via remortgage so secured loans are really helpful. Many products are specifically designed to accommodate poor credit and allow borrowers to keep their existing mortgage rate. Even if a remortgage was available, it would probably mean their entire mortgage would move to a higher rate and cost far more. Just paying the higher on the secured loan can make better financial sense.

          Maybe, due to affordability or you’ve changed your job there isn’t an attractive mortgage product available. Consider keeping the existing mortgage and raise the cash you need with a secured loan.

          Secured loan lenders are better at debt consolidation

          Most mortgage lenders don’t like debt consolidation. They often apply restrictive criteria so it just doesn’t work. Secured loan lenders are really geared up for debt consolidation and can be a useful aid to sort out expensive unsecured credit with a view to remortgaging back to mainstream lenders at some point in the future once your income and outgoings are in control.

          Beware comparison sites – they can restrict your choice

          Secured loans are a really versatile product and great for some people. But don’t assume by reading this page they are ideal for you. Don’t look at secured loans in isolation and don’t simply go online and apply to a “secure loan specialist”

          Secured loans need to be looked at as part of a range of products to deal with your needs which means considering and comparing both a remortgage and a secured loan side by side.

          When you apply online, the chances are, you’ll end up with a “secured loan expert” and they won’t look at the remortgage option for you. The reason they won’t look at it is because it’s really difficult to compare both and make a recommendation. So they’ll just stick to secured loans because it’s easy. Great for them – really rubbish for you as you are being denied access to probably 75% of the products available.

          Always, always find an advisor who compares and advises on both secured loans and mortgages PLUS has direct access to the secured loan lenders and understands them well.

          What is a secured home owner loan?

          Let’s say you’ve got a property worth £500,000 and you owe £200,000 pounds on your mortgage.

          Then you want to raise another £100,000
          Rather than remortgaging for up to £300,000, you take out a separate loan for £100,000.

          The loan is registered against your property at land registry in the same way as your mortgage. Your mortgage lender has the first charge registered at land registry. Your secured loan lender has the second charge registered at land registry. Hence, you often hear a secured loan referred to as a second charge loan. It’s the same thing.

          This means, that when you come to selling your property, the first charge gets repaid first and the second charge gets paid off second. Consequently, the lender knows its got a strong chance of getting its money back as it has security. Just like your mortgage, your home is at risk. The key difference is the loan is from a different lender on different terms.

          Why consider a secured loan for debt consolidation with a different lender?

          With a different lender you can get different terms, different risk appetite, different repayment periods, different affordability calculations, different LTV’s etc etc.

          • Some secured loan lenders grant loans up to 100% loan to value and even beyond.
          • Where as most mortgage lenders cap your borrowings at four and a half times your income, secured loans regularly go up to six times your income. This allows you to potentially borrow more.
          • A secured loan lender might be more accommodating of different property types and conditions, including Buy to Let property or even commercial property.
          • They might accept different job types and income types
          • They usually offer greater flexibility around the purpose of the loan, especially if it’s for business purposes, tax etc.

          Simply put, you can often get more flexibility from a secured loan but don’t take it for granted. As mentioned above, it’s important you deal with somebody who is a secured loan specialist but also advises on mortgages and can compare both options for you.

          What about debt management or an IVA to help manage debt?

          You might be thinking of using debt management to reduce your outgoings. However, it may well be debt management which has caused other people, or you, problems in the first place.

          This is because, when going to debt management they freeze all your repayments. This shows on your credit search and you then get a bad credit history.

          If you have a good credit history now, take great care not to wreck it for years to come by taking on debt management or entering an IVA. Of course if you already have poor credit it has less impact but could mean that you have bad credit for many years to come until the debts are settled. Therefore, it’s longer before you can borrow on mainstream terms.

          Taking a consolidation loan now can help to crystallise your bad debt now, maybe settle historic CCJ’s and defaults and help you back to main stream borrowing sooner.

          There is no “one size fits all”. Take advice and take action.

          If you a consolidation loan or mortgage isn’t for you, help at https://www.gov.uk/national-debtline


          Talk to a Promise Money adviser for more details


          Pages which others have found useful…

            Find a secured loan

            Enter some details and we will estimate your repayments on our popular loan plans – this will NOT affect your credit rating.

            How much you would like to borrow?

            £

            Type in the box for larger amounts

            For how long?

            yrs

            Use the slider or type into the box

            What best describes your credit rating?

            Perfect: In the last year you have no mortgage arrears, CCJs or defaults. Your credit score is high.

            Your repayments are estimated at

            £249.51 per month


            More than 50% of borrowers receive offers better than our representative examples. The %APR rate you will be offered is dependent on your personal circumstances.
            Secured / Second Charge Loans secured on land
            Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55.730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.2
            By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

            Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

            More than 50% of borrowers receive offers better than our representative examples

            The %APR rate you will be offered is dependent on your personal circumstances.

            Mortgages and Remortgages

            Representative example

            Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

            Secured / Second Charge Loans

            Representative example

            Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

            Unsecured Loans

            Representative example

            Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


            THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

            REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


            Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
            Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

            Authorised and regulated by the Financial Conduct Authority – Number 681423
            The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

            Website www.promisemoney.co.uk

            Latest Articles


            Buy to Let FAQs

            15th November 2023

            By Karina Nowicka

            What does buy to let mean?

            Buy to let, or BTL, is a term used for properties that are used specifically for letting or renting out. Generally it relates to single dwellings on a single letting

            Is buy to let still worth it?

            Of course, all investments involve taking a huge risk. The same goes with property investment. Buy to lets can be worth it in the long run, as your property will go up in value. It’s also worth mentioning that the demand for affordable housing is rising. However the rental income versus the cost of ownership is the main short term requirement. Will the the costs of the mortgage, void periods, maintenance, etc be lower that the rental income. If not, why bother?

            Can you live in your buy to let property?

            The answer is no. Buy to let mortgages are specifically designed for landlords, meaning they can only be let out to tenants. With that being said, landlords may get permission from their residential mortgage lender to stay in the property for a short period of time.

            You may need to re-mortgage if you wish to stay in the property – check with your lender.

            How much profit do landlords make in the UK?

            Landlords can make around £15,000 annually, before tax and other reductions. For most landlords, rental income accounts to 42% of their rental gross income. A little over 26% of landlords, however, report a gross rental income of £20,000-£49,999 and 13% report an income of £50,000+.

            Are there any legal obligations for a buy to let landlord?

            There’s a few requirements for landlords when it comes to their buy to lets.

            • Protect deposits
            • Insure the property
            • Ensure gas and electrical equipment is safe
            • If furnishings are provided, they must comply with the latest fire regulations
            • Provide energy performance information
            • Repairs and upkeep
            • Smoke alarms and carbon monoxide detectors – not a legal requirement but best practice

            How much deposit is required for a buy to let mortgage?

            There varies depending on the market and strength of property prices. It has been possible to get a BTL mortgage with a deposit of 15%. With that being said, the rates will be much higher, and there are not that many products available within this bracket. In other words, most lenders require experience in property investment and a portfolio. So, new landlords may not qualify for high LTV products. In a strong economic climate 80% to 85% LTV is possible. In a challenging climate expect more like 75% LTV

            How is the rental income taxed?

            Tax is paid on the profits made from the rental properties. Profits are based on the sum the landlord is left with once the expenses or allowances have been deducted. There are two types of income tax; Corporation and Personal Income Tax.

            The tax you will have to pay depends on how you have set up the rental property. If you own the property personally, then you will have to pay personal income tax. Income tax is paid by a UK resident that earns over the tax threshold. How much tax you will have to pay depends on how much you earn.

            However, if you set up a limited liability company to manage the rental property, then the business will have to pay corporation tax. Corporation tax is paid by UK companies and is a tax based on how much the company makes in profit annually.

            So, what counts as rental income?

            The income is generally the rent paid to the landlord. But, it also covers any other payments from tenants for services that are normally provided by the landlord. These include cleaning, utility bills, repairs etc. 

            Non-refundable deposits to the landlord also fall under this bracket and are seen as rental income. So is any money kept from a deposit at the end of a tenancy.

            What repairs are landlords required to make in their buy to lets?

            The landlord is legally required to ensure that the property is of an acceptable standard for someone to live in. Therefore, they have to maintain the property and make sure that the premises are safe. Landlords must also ensure that gas appliances, electrical appliances and everything within the property such as furniture is safe. Also, repair or replace them if necessary. 

            Are tenants’ security deposits protected?

            All security deposits have to be protected. However, there are some instances where it doesn’t have to be. For example, if you’re a lodger or a student living in halls. 

            There are three schemes which have been authorised by the government to protect security deposits. These are:

            • Deposit Protection Scheme – landlords may use this method to hold a tenants deposit in a bank account. Providing that there has been no damage caused to the property at the end of the tenancy, the money is returned to the tenant in full. This scheme is free and there are no charges to the landlord or the tenant.
            • MyDeposits – this scheme is insurance-based and can only be used by members of approved trade associations. This service is free for tenants, however the landlord or the agent will be paying a fee that funds the insurance. The landlord/agent can hold the deposit, but if failure to repay occurs, the insurance will pay it back to the tenant in full.
            • Tenancy Deposit Scheme – this service works in the same way as MyDeposits. It is insurance-based and the tenant does not pay a fee.

            What if a landlord fails to repay a deposit?

            If a tenant has paid a deposit at the start of the tenancy, no matter the amount, they are legally obligated to get it back. The landlord/agent can only take money off if there is a good reason – ie. damage caused to the property, missed rent, or lost or broken items.

            An important factor to note is that deposits paid by the council are not returned to the tenant. Any damages caused to the property are taken off the deposit and paid back to the council. This means the remaining balance will have to be repaid by the tenant.

            What happens if the tenant fails to pay rent on time?

            Firstly, the landlord/agent should immediately contact the tenant and ask why their rent hasn’t been paid. There are several paths the landlord can go down if rent cannot be paid:

            • Negotiate. If the tenant is going through a temporary financial hardship, agree on smaller payments, until they can afford to repay the remaining balance. Communication between landlords and tenants is essential, as it avoids confusion and further problems.
            • Eviction. Provided that the landlord has let the property using an assured shorthold tenancy, they may be able to evict the tenant. It all depends on the circumstances, such as the notice period required or how many months worth of rent is owed.
            • Court action. This is the last option for many landlords, as it involves a lot of money and time. However, if the tenant has missed multiple payments, landlords can take legal action to recover any money they have lost.

            Can landlords inspect the property during a tenancy?

            The simple answer is yes. Landlords SHOULD inspect the property regularly, mainly due to their maintenance and repair obligations. With that being said, it is advised that landlords inspect their properties anyway, simply to see how their tenants are treating it. The landlord’s rights of entering the property should be settled and agreed on with the tenant at the start of the tenancy. 

            What checks do landlords perform on tenants before letting a property?

            A lot of the time, landlords/agents will ask the tenant to provide some references. These could be references from a previous landlord, an employer or their bank. Landlords can also run a credit check on future tenants to authorise their affordability.

            There are multiple checks the landlord must run on a prospective tenant before letting them rent. Under the “Right to Rent” rules, every tenant/lodger needs to pass the immigration status checks, to make sure that they are legally allowed to rent property in England. (Please note that these rules do not apply in Scotland, Wales and Northern Ireland). Landlords found letting property to citizens who are not allowed to stay in the UK can face fines of up to £3,000.

            Tenants must also show proof of identity and residency in England. This can be a valid driving licence, passport or a visa – please note that they must be in date. To find out more, head over to GOV.UK “Right to Rent” rules. 

            What are the advantages and disadvantages of buy to let?

            There are many advantages and disadvantages to investing in property. Some of the disadvantages include stamp duty, rental voids, drops in property value or simply the amount of responsibilities.

            However, there are also many advantages. These include pros such as generating extra income, building up a portfolio or potential house price growth. Property is still overall a great investment in the long term.

            Can family members live in a buy to let?

            The answer is yes, they can! If they will occupy less than 40% of the property there is no issue. If the landlord wants to rent the entire property to family members, rather than a standard buy to let mortgage, a regulated buy to let mortgage is required. This may come with more detailed checks particularly around affordability

            What properties class as Home in Multiple Occupation (HMO)?

            It’s crucial for landlords to know if the property they are letting is an HMO. This is because of the specific rules that only apply to HMOs, in comparison to other types of property. So, a property will be classed as an HMO if:

            • The building, flat or house in which more than one household shares basic facilities, such as a bathroom, kitchen, and living area.
            • At least three tenants live at the property and form more than one household.
            • The building has been converted and does not comprise self-contained flats.

            Talk to a Promise Money adviser for more details


            Pages which others have found useful…

              Find a buy-to-let mortgage

              Enter some details and we’ll compare thousands of mortgage plans – this will NOT affect your credit rating.

              How much you would like to borrow?

              £

              Type in the box for larger amounts

              For how long?

              yrs

              Use the slider or type into the box

              Do you own property in the UK?

              About you...

              Your name:

              Your forename:

              Your surname:

              Your email address:

              Your phone number:

              Notes...


              By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

              Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

              More than 50% of borrowers receive offers better than our representative examples

              The %APR rate you will be offered is dependent on your personal circumstances.

              Mortgages and Remortgages

              Representative example

              Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

              Secured / Second Charge Loans

              Representative example

              Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

              Unsecured Loans

              Representative example

              Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


              THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

              REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


              Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
              Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

              Authorised and regulated by the Financial Conduct Authority – Number 681423
              The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

              Website www.promisemoney.co.uk

              Latest Articles


              Unsecured Business Loans

              15th November 2023

              By Alex Walker

              What is an unsecured business loan?

              YouTube player

              With unsecured business loans, the theory is, you don’t secure any of your assets against the loan. When you choose this funding type, your business won’t risk losing any valuable items, property, or land.

              An unsecured business loan could be a straightforward funding option. You may be able to take out a loan valued up to £500,000 without needing to put valuable assets as security.

              You can access an unsecured loan fairly quickly and repay them over a short or medium term.

              Unsecured business loans are a flexible way to receive funding for any business that lacks assets or wants to avoid securing its assets against a loan. Usually, you can access the funds within a couple of hours to days depending on the loan amount. Could can repay it within an agreed timeframe or early, often with no penalty.

              However, depending on the strength of your business and the amount you are borrowing, the lender may insist on you providing a personal guarantee or a company debenture.

              How do unsecured business loans work?

              They can be structured in many ways. Here are some examples

              • Straight forward capital and repayment loan – borrow £X over Y years at Z% interest rate
              • Merchant loan – borrow a percentage of your credit card turnover with repayments deducted from each transaction – used for cash flow
              • Invoice finance – borrow against the value of you invoices yet to be paid – also known as factoring.
              • Revolving credit – works more like an overdraft but again can be attached to credit card sales
              • Overdraft – often granted by your bank giving you flexibility to draw and repay cash as required
              • Business credit cards – these are effectively short term loans allowing you to buy now and pay later

              Advantages of business loan

              Unsecured business loans come with several benefits. If you’re looking to borrow a sum of cash quickly without securing your assets against the loan, then unsecured loans may be suitable for you.

              Suitable for new and established businesses

              New and long-standing companies can use unsecured business loans.

              No need to secure any assets

              Because your assets are not secured against the loan, it’s a quick and accessible way to get a sum of money compared to other types of business loans.

              Suitable for any purpose

              You can use the lump sum towards any form of business purpose. This could include buying new equipment, funding training sessions or entering overseas markets. There are no limits to how you can use the unsecured business loan.

              Quick application process

              Since unsecured business loans are not secured against your assets, you may access the loan faster than a secured loan. You may be able to borrow up to £500,000 or more, depending on your situation.

              Repayment plans are flexible

              Many lenders offer repayment plans with no hidden fees, and interest rates can be agreed upon beforehand. You have the option to repay the loan between one month to five years.

              Disadvantages of unsecured business loan

              While unsecured loans can be a good way to access a large sum of money quickly, there are some potential pitfalls you need to consider.

              High-interest rates

              Unsecured loans pose a greater risk to lenders since they are not secured against any assets. So they are more expensive to take out. Although the loans come with high-interest rates, it may be more costly for your business if you don’t take out a loan.

              Smaller loan sum

              Lenders are less likely to approve large loan sums with no security. This is because it would put lenders at a higher risk. So, you’re going to have to use a smaller loan amount. This type of loan may be right for you if you’re looking for a small amount of cash without securing any of your assets. But, if you’re seeking a large sum of money, this option may not suit you unless you provide personal guarantees.

              Must meet specific eligibility criteria

              Since your assets are not secured against the loan, you will have to meet certain requirements. Lenders will want to minimise risk and ensure the loan is right for you. You’ll need a good credit history and show proof of consistent income. If your lender believes that you’re going to make repayments on time and in full, you will have a higher chance of approval.

              Personal Guarantees and Debentures

              With a personal guarantee you are agreeing to pay the business loan personally if the business fails to do so. This means the lender could force you to sell personal assets to repay the debt.
              Debentures are in simple terms a charge over the business assets. Whilst the loan is not secured on a specific asset, a debenture gives the lender rights over the companies other assets if you fail to repay the loan. So whilst some unsecured loans may not feel as if they are secured on a particular asset, the lender does have significant security via the back door.

              Who is it suitable for?

              Unsecured loans can be helpful for businesses with high fluctuating cash flows that may have unexpected expenses. Companies with low or negative balances can use such loans as a form of working capital. Similarly loans can be used to support expansion or to purchase assets or property.

              What requirements do I need to meet for an unsecured business loan?

              You will need to meet the below eligibility criteria to qualify for an unsecured business loan:

              • Ideally you will have a registered company in the UK that has operated for at least six months.
              • There are special schemes for new business – even if they have not started trading yet
              • Your company needs to be a limited company, limited liability partnership, sole trader or partnership.
              • The business premises should primarily trade in the UK.
              • Your company should make at least £10,000 per year except in teh start up scenario.
              • The director or shareholder of your company needs to be over 18 years old.

              What documents do I need for an unsecured business loan?

              You need to prepare a number of documents when you apply for an unsecured business loan. The documents you need will depend on the lender, but generally, you will be asked to show the following:

              • Proof of identity and address
              • Business verification documents
              • Company’s bank statements
              • Personal guarantee (may be required by the unsecured loan agreement)

              How long will it take for an unsecured business loan to get approved?

              Unsecured loans are typically easier to gain than secured loans, and the approval process can be reasonably quick. You can expect your application to take a few days to get approved. Sometimes, your funding will be available to you on the same day as submitting your application.

              Secured loans take longer to get approved since lenders need an independent valuation of the assets you intend to secure against the loan. But with unsecured loans, there is no need for this process, and funding may be available to you faster.

              Is it safe to use an unsecured business loan?

              Since there is no need to secure your assets against an unsecured business loan, they are deemed as a less risky option for the borrower. Keep in mind, though, that all loan types have potential risks. When you take out an unsecured loan through a regulated lender, you will get a loan agreement that is suitable for your business.

              The FCA regulates many lenders. It’s also in the lender’s best interest to ensure you’re able to make repayments on time and in full. So you should not be worried about the safety of unsecured business loans so long as you do your due diligence and choose a verified lender.

              Don’t forget that personal guarantees and company debentures will bring in extra risk.

              Also that many business loans are not regulated so the lender could hide all sorts of penalties in the small print.

              If in doubt get in touch with Promise Money.



                Find a commercial loan

                Enter some details and we’ll compare thousands of loan plans – this will NOT affect your credit rating.

                How much you would like to borrow?

                £

                Type in the box for larger amounts

                For how long?

                yrs

                Use the slider or type into the box

                Do you own property in the UK?

                About you...

                Your name:

                Your forename:

                Your surname:

                Your email address:

                Your phone number:

                Notes...


                By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

                Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

                More than 50% of borrowers receive offers better than our representative examples

                The %APR rate you will be offered is dependent on your personal circumstances.

                Mortgages and Remortgages

                Representative example

                Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

                Secured / Second Charge Loans

                Representative example

                Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

                Unsecured Loans

                Representative example

                Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


                THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

                REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


                Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
                Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

                Authorised and regulated by the Financial Conduct Authority – Number 681423
                The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

                Website www.promisemoney.co.uk

                LTV Explained

                15th November 2023

                By Karina Nowicka

                What is LTV?

                Loan to value (LTV) is the difference between the amount you’re borrowing and the value of the property or asset you’re using to secure the loan. It’s one of the main aspects banks and lenders will look at to help them decide what rate you should be charged at on your mortgage. They will also look at your income and check your affordability to ensure that you can definitely pay them back.

                Lenders may also look at your deposit, the price of the property, and how much you’re looking to borrow. This is where the LTV comes in. LTV is expressed as a percentage, and it allows lenders to calculate the risk that they’re taking by lending to you.

                How does LTV work?

                Let’s say you have a mortgage of £180,000 on a house worth £200,000. In this scenario, the amount you borrow would be 90%, and the remaining 10% would be your £20,000 deposit. This means the LTV of this mortgage would be 90%. So, the bigger your deposit, the less you will have to borrow. Basically, a low LTV ratio is more desirable. Lower LTV means lower interest payments, a lower mortgage and a lower risk for the lender.

                First time buyers usually have a higher LTV ratio, meaning their monthly repayments are higher. The average LTV in the UK for first time buyers is 82%. This is because they haven’t yet built up any equity or savings. Whereas people who are moving home, tend to have an average LTV of 75%. 

                The reason LTV is so important

                Generally, lenders will see borrowers that require higher LTVs as a higher risk. This is due partly to the borrower’s affordability. If they can only afford to purchase a small percentage of the property, they will seem a higher risk compared to someone who can put down a bigger deposit, and borrow less. 

                Another reason for that is in the case of repossessing the property. If the borrower ends up not paying off their mortgage, their property will get repossessed. The lender would then have to re-sell in order to earn back what they have lost. This can be tough in a high LTV scenario especially if the property is in poor condition or needs to be sold at auction.

                The highest LTV available

                Not every lender will do this, but some lenders can offer a 100% mortgage under certain circumstances. Yes! This means you do not need a deposit and can borrow the entire property value. Unfortunately, this is rare. The criteria is very strict, and you may need a trustworthy guarantor that is willing to take the huge responsibility of making your mortgage repayments if you don’t. Therefore, unless you can pass the strict rules, 100% mortgages are very unlikely. 

                Improving your LTV

                There are a few ways you could potentially improve your LTV

                • Wait until you’ve saved up for a bigger deposit. Bigger deposit = lower monthly repayments. Sometimes it’s worth waiting a little longer.
                • Find ways that could help you improve your property’s value. Homes gain value quite quickly in the recent property market. If you can increase the value of your home, you are more than likely decreasing your LTV. However that doesn’t help you buy it
                • Make an offer to the seller when buying the property. You can negotiate, and try to bring the sale price down. As an alternative, you could just search for a cheaper house so your deposit goes further and you borrow less.
                • Keep repaying your mortgage or make over payments. You own more and more of your home with every payment. As a result, your equity increases and LTV drops.

                How much should I ideally save for my deposit?

                Saving for a house deposit is not easy, but it’s a big step into owning your own home. The lowest deposit you may need is 5% of the property’s value. However, in 2022, most lenders and banks will look for a 10% deposit for first time buyers. In the UK, the average house price is estimated at an average of £270,000 (£514,000 in London). 

                Remember: house prices vary in different parts of the country.

                Example

                If you are buying a property worth £250,000 you may need:

                • 5% deposit – £12,500
                • 10% deposit (what most banks will prefer) – £25,000
                • 15% deposit – £37,500
                • 25% deposit – £62,500

                Of course, the bigger your deposit, the better. Heftier deposits have a lot more advantages, and you are a lot more likely to find a better mortgage deal, with lower interest rates.


                Talk to a Promise Money adviser for more details


                Pages which others have found useful…

                  Find a mortgage

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                  More than 50% of borrowers receive offers better than our representative examples. The %APR rate you will be offered is dependent on your personal circumstances.
                  Mortgages and Remortgages secured on land
                  Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
                  By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

                  Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

                  More than 50% of borrowers receive offers better than our representative examples

                  The %APR rate you will be offered is dependent on your personal circumstances.

                  Mortgages and Remortgages

                  Representative example

                  Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

                  Secured / Second Charge Loans

                  Representative example

                  Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

                  Unsecured Loans

                  Representative example

                  Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


                  THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

                  REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


                  Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
                  Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

                  Authorised and regulated by the Financial Conduct Authority – Number 681423
                  The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

                  Website www.promisemoney.co.uk

                  Latest Articles


                  Expat Buy to Let Mortgages

                  15th November 2023

                  By James Jones

                  Expat Buy to Let Mortgages

                  A buy to let mortgage (BTL) allows you to purchase a property with the intent to rent it back out. Expat Buy to Let Mortgages are a product that ex-UK nationals can take out. This allows expats to rent out a property in the UK whilst they are living abroad. As a result, it will provide expats with income so it will help with their retirement abroad. In addition, expats may also wish to use the property that they have rented out upon their return to the UK.

                  Most lenders consider expat buy to let mortgages riskier. So having good credit could be crucial to maximising the amount of opportunities presented to you. If you have bad credit, it could severely hurt your chances of securing a good deal. However, If you do have bad credit, there are specialist bad credit mortgage lenders that specialise in helping people who are struggling to get a mortgage deal. 

                  Beware that if you have no credit footprint in the UK it could make it harder to find a lender as they have no guide to your credit worthiness. Poor credit may be preferable to no credit.

                  Pros

                  • The main benefit of an expat buy to let mortgage is that it generates an income for the property owner. This is valuable for expats as it makes living abroad easier and it helps with financial stability. 
                  • Another benefit of expat buy to let mortgages is that the value of the property may increase over time depending on the market. It is not guaranteed that your capital will increase. But large investments such as properties have benefited some landlords in the long run. 
                  • The rental market is in high demand with many first time buyers looking to rent. Certain people may not be able to take out a mortgage with their current circumstances. With mortgage criteria becoming more strict and housing prices increasing, people seek out renting as an easier alternative. However, there could still be lenders that can help you out. So it is always worth exploring all your options.

                  Cons

                  • It may be tougher for expats to get buy to let mortgages than UK citizens because mortgage lenders may charge higher interest or demand larger deposits. 
                  • Another concern is that expats can struggle with establishing income and affordability due to having less financial ties in the UK
                  • Expats can sometimes have less UK credit history due to them being overseas for a long period of time. Some expats have credit cards of which they can keep track of their credit records through financial associates in the UK.
                  • You may need to deal with new / different tax regimes and exchange rates.
                  • The legal system may be different to what you are used to. This can lead to costly advice.
                  • People – can you trust the people who represent you abroad – or will they rip you off?
                  • As an investment property is not very liquid, it’s harder to dispose of. This may be even harder if it’s in a different country
                  • Costs of repairs and maintenance – may well be higher or less reliable
                  • Local knowledge – do you know the area as well as you should – micro economics can have a big impact on rents and capital appreciation.
                  • How do you intervene when something goes wrong

                  Other avenues to explore

                  Multi Unit Block

                  You may want to consider whether you would want to rent out your property as an Expat multi unit block. A multi unit block (MUB) is a property that is usually made up of multiple smaller units within the structure. Within the property, people live separately. So the bathroom, kitchen and washing facilities are exclusive to one of the tenants. Multi unit blocks can sometimes be classed as houses in multiple occupation (HMO). This depends on whether there are shared facilities as well as the individual self contained living quarters.

                  Houses in Multiple Occupation

                  Houses in multiple occupation (HMO) are determined by the sharing of a property to 3 or more tenants who are not part of the same household. HMO tenants share their kitchen and bathroom facilities. NOTE: if the property is 3 stories or more and you rent it out to 5 tenants or more then your property will be considered as a large HMO. By law, you must have a licence for the property and it must meet certain criteria. This is known as Mandatory Licensing. Click here to head over to the government website page on Mandatory Licensing. 

                  Lenders often expect expats to be earning at least £25,000 minimum. Lenders may also require that any income earned abroad is paid into a UK bank account. Although, there are other lenders that are happy to calculate affordability with income paid into a foreign bank account. This can vary depending on the particular country that the expats are located. lenders may not cater for certain countries. 

                  Applying for a mortgage that can be paid off by the time you’re 70 can boost your chances of getting a mortgage approved. Working with a mortgage broker is a good idea to help boost your chances of getting a buy to let expat mortgage.



                    Find a buy-to-let mortgage

                    Enter some details and we’ll compare thousands of mortgage plans – this will NOT affect your credit rating.

                    How much you would like to borrow?

                    £

                    Type in the box for larger amounts

                    For how long?

                    yrs

                    Use the slider or type into the box

                    Do you own property in the UK?

                    About you...

                    Your name:

                    Your forename:

                    Your surname:

                    Your email address:

                    Your phone number:

                    Notes...


                    By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

                    Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

                    More than 50% of borrowers receive offers better than our representative examples

                    The %APR rate you will be offered is dependent on your personal circumstances.

                    Mortgages and Remortgages

                    Representative example

                    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

                    Secured / Second Charge Loans

                    Representative example

                    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

                    Unsecured Loans

                    Representative example

                    Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


                    THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

                    REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


                    Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
                    Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

                    Authorised and regulated by the Financial Conduct Authority – Number 681423
                    The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

                    Website www.promisemoney.co.uk

                    Latest Articles


                    Buy to Let Properties and Tax

                    15th November 2023

                    By Karina Nowicka

                    Find out the latest tax rules and how they will affect you

                    With this guide prepared for Promise Money by Accord Mortgages

                    Property taxes can be complex and amongst all of the other things that landlords need to consider. This includes finding suitable tenants and ensuring the property meets all the necessary standards. It’s easy to forget about tax.

                    That’s where this guide comes in. We’ll explain the main things you need to know about taxes associated with your Buy to Let property.

                    This guide is correct at the time of publication and we recommend landlords consult an accountant or tax adviser about their personal situation.

                    Stamp duty

                    When you purchase land or property you will likely pay stamp duty land tax (SDLT) in England. Land and Buildings Transaction Tax (LBTT) in Scotland or Land Transaction Tax (LTT) in Wales. The rate you pay will depend on the price you pay for the property, excluding any carpets, curtains and free standing furniture etc. at the market value (the amount that you would pay for these on the open market and not an artificially constructed value).

                    From 1 April 2016, the rate of stamp duty was increased by 3% on second properties which may be a second home or a buy to let property.

                    Companies also pay SDLT on all property purchases.

                    HMRC provide a calculator to enable taxpayers to establish the amount of SDLT payable:
                    Stamp Duty Land Tax Calculator

                    Stamp duty has to be paid within 14 days of completion of the transaction alongside the submission of a SDLT return or penalties and/or interest may become due.

                    It’s also important to note that Stamp Duty Land Tax Rates have changed in September 2022 in a way to tackle inflation. To read the full guide, click here.

                    Accruals vs cash basis

                    Rental accounts are relatively easy to prepare for a single property, although you may still prefer the reassurance of using an accountant to look after your affairs.

                    Previously, both income and cost had to be included in rental property accounts on an “accrued” basis. For example, in the tax period, they were incurred rather than when they were actually paid or received. Since 6 April 2017, the default is the “cash” basis for those with rental income below £150,000 pa. This is usually much simpler as it means that you include receipts and payments when the money moves and ignore anything that is still owed. If this is your only business income then it is easier to manage as you can just keep a separate bank account for your property transactions.

                    You can still opt to use the accruals basis if you prefer.

                    Income Tax

                    Individual landlords used to be able to claim all of your mortgage interest as a deductible cost against residential property income. However, this is no longer the case due to the Finance Act 2015 coming fully into force in the tax year 2020–21 onward. You now have to pay income tax on all rental income after allowable expenses have been deducted (see below). You are then able to claim a tax credit worth the equivalent of the basic rate of interest (currently 20%) of the annual mortgage interest you have paid via your tax return. (This tax credit is fixed at the basic rate regardless of the rate at which you pay income tax).

                    Landlords are able to deduct certain expenses from their rental income in order to reduce your tax bill.

                    Residential landlords can typically claim:

                    • Buildings insurance (not contents unless it is a furnished property)
                    • Light and heat
                    • Cleaning
                    • Gardening
                    • Security
                    • Rent and ground rent
                    • Service charges
                    • Council tax while vacant
                    • Repairs and maintenance (not improvements which are claimed against capital gains tax)
                    • Replacements
                    • Redecorating
                    • Small tools
                    • Legal e.g. preparation of rental contracts (legal costs on purchase and sale are claimed against capital gains tax, profit and loss on obtaining finance is not allowed as a finance cost)
                    • Accountancy fees
                    • Debt collection fees
                    • Other insurances (such as rental protection insurance)
                    • Advertising
                    • Letting agents’ fees
                    • Travel costs associated with your rental business
                    • Repairs or improvements?
                    • Repairs and improvements are usually both allowable costs but it is an important distinction as tax relief is claimed in one of two ways depending on whether building work is repairing or replacing pre-existing materials or whether it is an improvement.
                    • Repairs and maintenance costs can be deducted to reduce your income tax and usually include:
                    • Painting and decorating
                    • Re-pointing existing brickwork
                    • Damp or rot treatment
                    • Repairs to existing equipment, windows, doors, etc.
                    • Replacing a roof
                    • Like for Like replacements (example, if you replace a garden shed worth £500 with one worth £1000, you can only claim income tax relief on £500 – the value of the shed you have replaced.)
                    • Capital items are work which improves the property such as an extension. These costs can be claimed to reduce your capital gains tax when you come to sell the property.
                    • Sometimes it is hard to tell if an item is a replacement or an improvement so, if you’re unsure, do take tax advice.
                    • Furniture and fittings
                    • Since 6 April 2016, it is only possible to claim the actual cost of repairing or replacing these items. This means that you should keep your receipts etc. There is no longer a 10% wear and tear allowance on furnishings and appliances.
                    • Capital gains tax
                    • When the time comes to sell, hopefully your property will have increased in value. Unlike selling your main home, this increase in value is taxable as a capital gain.
                    • The good news is that you can claim the costs of purchasing, selling and improving the property.

                    If the property was your main residence at any time then there may be reliefs available. You may also qualify for up to £40,000 letting relief per owner.

                    Letting relief is complex and if you wish to see whether you qualify for this relief, your best option is to seek advice from a tax adviser.

                    An example taxable gain is below:

                    • Selling Price £250,000
                    • Less Purchase Price (£175,000)
                    • Less Purchase Costs (e.g. professional fees) (£5,000)
                    • Less any capital improvements (£10,000)
                    • Less any selling costs (e.g. professional and advertising fees) (£1,750)
                    • Capital Gain (£58,250)
                    • Less any tax reliefs (e.g. capital losses) (£750)
                    • Net taxable gain £57,500

                    There is an annual capital gains allowance for each individual owner (currently £12,570) to offset net gains/losses in the year of disposal. Everything above this allowance is currently taxed at 18% or 28% for residential property depending on your normal income tax rate.

                    If you are thinking of selling a property that has significantly increased in price then it may be worth taking individual tax advice early in the process and definitely before the sale itself as there may be actions that can be taken in order to minimise your tax burden.

                    Landlords now have 60 days to report and pay capital gains tax when selling a property (an increase by 30 days which was announced in October 2021). VAT (Value Added Tax) and Making Tax Digital (MTD)

                    New legislation was introduced in April 2022 which means any VAT registered businesses with turnover below £85,000 must now file their VAT return digitally which means using special accounting software. Visit https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat for more details.

                    Differences for companies

                    If you decide to use a limited company to hold your property portfolio, you will pay tax on profits as corporation tax. The standard rate is currently 19% on all profits. The standard rate of corporation tax will increase from April 2023 to 25% (for those companies with profits in excess of £250,000). For companies with profits between £50,000 and £250,000 there will be a marginal rate and for companies with profits under £50,000, the 19% rate will continue.

                    Since 1 April 2016, the Annual Tax on Enveloped Dwellings (ATED) regime has applied to all UK residential properties worth over £500,000 owned by companies, partnerships with one or more corporate members, and collective investment vehicles – all of which are referred to as Non-Natural Persons (NNPs). The rate varies depending upon the value of the residential properties from a minimum of £3,800 to a maximum of £244,750 per annum.

                    For more information about the regime see Annual Tax on Enveloped Dwellings – GOV.UK.

                    You will potentially have to pay further tax/NIC when you want to take the profits out of the company as salary (PAYE/National Insurance) or dividends (dividend tax). From April 2022, the NIC rate was increased by 1.25% .

                    There is no annual allowance for a company’s capital gains on sale.

                    Companies can claim tax relief in full for the costs of finance (such as mortgage interest) and there can be tax relief for capital assets employed in the business such as vehicles, office furniture and equipment etc in the form of capital allowances.

                    Using a limited company may give you opportunities for tax planning but there will also be higher ongoing administration and accountancy costs. There are also different inheritance tax rules when transferring shares in a property company rather than transferring the properties themselves.

                    Differences for trusts

                    There may be Inheritance Tax (IHT) advantages if your property is held in a trust. If you are thinking of using a limited company or a trust then it is worth taking professional advice.

                    Next steps

                    This guide is intended as a brief overview of the main ways that your residential property investment will be taxed and is correct at the time of publication. Next steps for landlords might include:

                    • Ensure you understand the impact on your business and income now and in the future.
                    • Take a look at the suggested sources throughout the guide.
                    • Consider appointing an accountant or tax adviser if you don’t already have one. The more complex your income and the larger your portfolio, the more likely this is to be beneficial. ICAEW or ACCA are great websites for searching for accountants near you.
                    • Be aware that according to your situation, other taxes may apply and there are special rules for non-UK residents.

                    Date checked: April 2022
                    The information in this guide is correct as of the date on the document.
                    Promise Money does not accept any responsibility for how the guide is used.

                    If we become aware that the advice is out of date, we will remove the guide from our site. It is the responsibility of the user to ensure the guide remains correct as and when it is used or shared.
                    This is a guide to BTL tax changes and is not intended to reflect Promise Money’s BTL offering. If you’d like details of our BTL proposition, please contact our sales team or visit our website.


                    Talk to a Promise Money adviser for more details


                    Pages which others have found useful…

                      Find a buy-to-let mortgage

                      Enter some details and we’ll compare thousands of mortgage plans – this will NOT affect your credit rating.

                      How much you would like to borrow?

                      £

                      Type in the box for larger amounts

                      For how long?

                      yrs

                      Use the slider or type into the box

                      Do you own property in the UK?

                      About you...

                      Your name:

                      Your forename:

                      Your surname:

                      Your email address:

                      Your phone number:

                      Notes...


                      By submitting any information to us, you are confirming you have read and understood the Data Protection & Privacy Policy.

                      Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

                      More than 50% of borrowers receive offers better than our representative examples

                      The %APR rate you will be offered is dependent on your personal circumstances.

                      Mortgages and Remortgages

                      Representative example

                      Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

                      Secured / Second Charge Loans

                      Representative example

                      Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

                      Unsecured Loans

                      Representative example

                      Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


                      THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

                      REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


                      Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
                      Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

                      Authorised and regulated by the Financial Conduct Authority – Number 681423
                      The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

                      Website www.promisemoney.co.uk

                      Latest Articles