Borrowing additional money or re mortgage options for existing The Mortgage Works clients
Let’s not beat around the bush one of the main reasons why applicants would have been recommended to go down The Mortgage Works path is the fact they wanted a buy to let mortgage solution with ‘no minimum income’ requirements. This lender has attracted: professional landlords; self-employed applicants; older applicants; those people with irregular income; or income lower than £20,000.
[pullquote]No minimum income’ buy to let solutions[/pullquote]
This relaxation in criteria has provided the solution but can become problematic further down the line when the initial interest rate benefit period expires and you are stuck on the higher reversionary standard variable rate. This pain can be further compounded when you want to realise the capital growth potential by releasing more equity to expand your portfolio only to find that there is no one willing to lend on the ‘no minimum income’ basis.
The good news is there are more options than ever since the credit crunch to remedy to this plight. I name but three below, all of which have many pluses and minuses – which I’m happy to discuss with you in more detail – but I highlight the main ones below:
Option 1: Further advance from The Mortgage Works
Pluses: Underwriting is minimal. You do not normally need to pay for legal fees.
Minuses: Limited product choice. You must wait 6 months since the initial advance. Surveyors are strict.
Option 2: Secured Loan from all the ‘no minimum income’ lenders
Pluses: A separate term can applied to the additional borrowing. More reasons for the borrowing are acceptable. Credit issues are less of a problem.
Minuses: Rates for the additional borrowing are high.
Option 3: Remortgage from all the ‘no minimum income’ lenders
Pluses: Potential for greater borrowing.
Minuses: Potential for better rates.
The third option above is where the most significant changes have happened recently with the emergence of a cluster of willing remortgage ‘no minimum income’ takers. Their affordability assessment techniques vary: some work on ‘face-value’ (particularly for experienced landlords); others prefer to see credits in bank statements; some a healthy portfolio with a good and established yield; others will call the place of employment to ensure the job is legitimate – and more often than not a combination of these assessments applies. In short it is confusing but can be lucrative so if you want advice on how to navigate the buy-to-let minefield, whether you are currently with The Mortgage Works, or not please give us a try.
For more information on buy to let mortgages and remortgaging from The Mortgage Works please contact us on T: 020 7993 2044 or alternatively complete the simple enquiry form on the top right hand side of this page.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.