BTL Loans?

[robsti]

What do lenders look for in a buy to let loan application?

1) The salary of aplicant

2)The rental income of the property

3)Or a bit of both.

[R1 Loon]

A big deposit is normally the starting point.

[robsti]

R1 Loon said:

A big deposit is normally the starting point.

Thats a given! but what else?

[R1 Loon]

I think it varies massively across the lenders that are still in this market. The days of rental income on its own being OK are long gone. Most will want to see that your monthly income has sufficient to cover fallow periods, as they're trying to minimise the impact of rate rises when they do happen ie limit the repos.

My bank likes to set a "lending limit" across the piece and is happy for me to borrow whatever I want within that figure to do whatever I want with it, I just pick the product that applies.

[Sarnie]

Some, not all lenders , currently require you to have 6 months worth of mortgage payments in your account.

[Kudos]

robsti said:

What do lenders look for in a buy to let loan application?

1) The salary of aplicant

2)The rental income of the property

3)Or a bit of both.

Don't think there is any real rule of thumb.

Typically I'm seeing rental income of upto 130% of repayments, some state this at 7% interest rate.

They'll probably take into consideration your affordability (not salary) e.g. earning £3k/month but spending £2900 won't be good

It's a black art!

[robsti]

Kudos said:

robsti said:

What do lenders look for in a buy to let loan application?

1) The salary of aplicant

2)The rental income of the property

3)Or a bit of both.

Don't think there is any real rule of thumb.

Typically I'm seeing rental income of upto 130% of repayments, some state this at 7% interest rate.

They'll probably take into consideration your affordability (not salary) e.g. earning £3k/month but spending £2900 won't be good

It's a black art!

Is 7% typical?

[Kudos]

robsti said:

Kudos said:

robsti said:

What do lenders look for in a buy to let loan application?

1) The salary of aplicant

2)The rental income of the property

3)Or a bit of both.

Don't think there is any real rule of thumb.

Typically I'm seeing rental income of upto 130% of repayments, some state this at 7% interest rate.

They'll probably take into consideration your affordability (not salary) e.g. earning £3k/month but spending £2900 won't be good

It's a black art!

Is 7% typical?

Came across it from one well known company a couple of weeks ago, am told it's not uncommon

[Countdown]

Recently took one out through the Halifax. They lookd at

(i) My total salary
(ii) Total number of BTL (and other) loans
(iii) Amount of deposit I was putting down.

I had to put down a 25% deposit. They didn't insist that rental covered the mortgage as I had suffcient spare income each month. I'm still not best pleased at the rate (4.94%) and mortgage fees are ridiculous.

[BoRED S2upid]

Sarnie said:

Some, not all lenders , currently require you to have 6 months worth of mortgage payments in your account.

Things have changed over the last 4 years, back in the day the market was pretty similar to the mortgage market today, big deposit 25% minimum and rental to cover the repayments that was about it they were throwing money at you.

[Sarnie]

BoRED S2upid said:

Sarnie said:

Some, not all lenders , currently require you to have 6 months worth of mortgage payments in your account.

Things have changed over the last 4 years, back in the day the market was pretty similar to the mortgage market today, big deposit 25% minimum and rental to cover the repayments that was about it they were throwing money at you.

Whats that got to do with my post?

[BoRED S2upid]

Sarnie said:

BoRED S2upid said:

Sarnie said:

Some, not all lenders , currently require you to have 6 months worth of mortgage payments in your account.

Things have changed over the last 4 years, back in the day the market was pretty similar to the mortgage market today, big deposit 25% minimum and rental to cover the repayments that was about it they were throwing money at you.

Whats that got to do with my post?

I was just suprised at how things have changed, could have used any post or no post.

[hamski]

If you need it to be based on rental alone, there are a few who will do it this way, and expect rental to cover mortgage interest by 125% at c5%.

Otherwise, most will expect you to prove £20 - £25k per annum