A portfolio landlord is anyone who has four or more mortgaged buy to let properties. These mortgaged properties can be in personal names or limited company and can be solely or jointly owned.
Many full time or professional landlords who make their income primarily from rental property, will fall under this bracket, and will need to apply for portfolio landlord mortgages instead of standard buy to let mortgage.
Portfolio landlord mortgages work slightly differently; it isn’t just a case of assessing an individual property. Lenders will consider the borrowing against all your assets to decide.
The reason behind this is that the UK’s Prudential Regulation Authority (PRA) introduced new guidelines in recent years, instructing lenders to take a more detailed approach to portfolio mortgage lending. Now, lenders are required to carefully examine factors like asset quality, lending across the portfolio, risk, and the investor’s track record.
This means arranging buy to let mortgages for a portfolio landlord can be quite challenging, making the experience of a broker like Advance Mortgages invaluable.
Portfolio landlord mortgages is a challenging and long-winded process at the best of times and since securing the most competitive interest rate and preferable terms can make the difference between a financially successful property portfolio and a struggling one.
As an expert specialist in the Buy-to-Lets, we at Advance Mortgages will ease the process for you.
Call us today to find out ways to expand your portfolio?
One challenge that portfolio landlords often face is that many lenders will impose caps on the overall borrowing a landlord can have across their entire portfolio.
The maximum aggregate loan size varies from lender to lender, but this can cause difficulties for portfolio landlords; especially if you own buy to let property in London or the South East, where property values are likely to be higher. This is complicated even further if you own very high value property.
Your property may be repossessed if you do not keep up with repayments on your mortgage or on any other secured loans.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% of the amount borrowed, but a typical fee is £495.
Some buy to let mortgages and commercial mortgages are not regulated by the Financial Conduct Authority.