Rental Calculations: How much can I borrow?
Talking shop at a dinner party is not everyone’s idea of a great evening.
I honestly believe this happens to mortgage brokers more than any other profession.…other than maybe doctors.
I was asked about how lenders calculate the loan available for a Buy to Let mortgage. Riveting conversation subject matter I’m sure you’ll agree?
The way a lender calculates the loan available on a BTL product via a ‘rental calculation’. This means the amount of rent received is a major factor in determining what the loan available to you will be. Each lender has a different calculation and criteria around which tax bracket you (the borrower) are in, (stop me if this is getting to complicated) changing the figures used in the calculation and giving a different outcome based on your personal circumstances.
The short version of this is you need an advisor who is well versed with Buy to Let in order to not only get the best deal but get a deal at all! We look after lots of portfolio landlords (you are a portfolio landlord if you own more than four properties in most lenders opinions) as well as landlords with one property. With ever changing criteria and a potentially volatile market place it is imperative to seek advice. Aside even from the fact that most Buy to Let lenders are unavailable to the borrower to access directly.
I know helpful!