Client A is an experienced buy-to-let investor who is looking to buy a property in need of repair. Once restored to a good standard, he believes it would be a good long-term investment – but traditionally, lenders have not offered loans unless a property is fit to let out immediately.
What the broker says:
Gemma Sewell, mortgage adviser, Frost Financial Services
The buy-to-let sector is still a burgeoning one that continues to outperform the overall mortgage market. This market expansion means there is an increasing number of product areas being explored, as rising demand forces lenders into pushing the boundaries and criteria to service additional needs.
What the packager says:
Les Daley, director, Pinnacle Mortgage Funding
Pinnacle has formed a number of good relationships with lenders, giving us access to a string of exclusive products.
We pride ourselves on knowing and understanding lenders’ criteria and procedures, and in doing so we have built up strong bonds with senior decision makers at many lenders.
When this case was sent to us, the immediate and obvious answer was The Mortgage Business and its House 2 House range. This range allows buy-to-let mortgages to be based on self-certified income rather than rental yields, which fits perfectly with this case and others like it where rental income will not allow for 85% lending on the current value. It is designed to fit the needs of customers in areas where the increasing supply of properties to let may restrict rental incomes.
The innovation of this product appeals to mortgage advisers and distributors, as it offers them a solution for customers who would otherwise have been unable to fund the purchase of a property.
By basing the lending criteria on the borrower’s own income, rather than rental income, it makes qualification for this product and the application process quicker and much easier for clients.
Many of the clients that approach professional brokers such as Frosts have an income that would comfortably allow them to adequately fund the purchase of one, two or three buy-to-let properties and we’re seeing more and more advisors switching on to the potential of this product.
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