I predict that this year is going to see a massive increase in BTL secured loans and lenders are already coming to the party. A year ago there were a couple of lenders. Now there are six and more are lining up to join in.
Below is a summary of the latest key features which I hope you find helpful.
Complex 1st and 2nd Charges 75% LTV on purchase 70% remortgages and 2nd Charges Rates start from 8.45% Only look at arrears on security property, ignore arrears on other properties Interest only available over £25000 Rental income must be 110% or 120% of secured loan lending – subject to plan Can use expected rental income if no AST is in place (use 90% of that figure) Accept adverse, Expats, no additional income, non standard properties. All adverse over 12 months old is ignored.
Heavy adverse LTV – 70% £100,000 max loan Unlimited adverse Regulated agreement – Lower ERCs – a good short term solution Full income and expenditure including the rental as qualifying income Rate 15%
Higher LTV 1st and 2nd Charges Up to 85% LTV Rates from 9.90% Loans over £100,000 on referral Min 120% rental coverage, full income and expenditure over 70% LTV Cross charges considered to support LTV HMO’s up to 70% LTV
I hope to see more prime products and lower rates in the near future – I’ll keep you posted
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
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.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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