Buy to let portfolio mortgage (A 3 point guide)
In this brief blog we will discuss buy to let portfolio mortgages, how to get them and what you can expect from a buy to let portfolio mortgage.
Buy to Let Portfolio mortgages
The buy to let mortgage market has seen huge growth over recent years although a bit stifled since the tax changes started to come into effect from 2017.There are still a large handful of buy to let portfolio mortgage landlords out there although so much has changed in the buy to let portfolio mortgage market.
Mortgage underwriting has now been changed due to the demands of the prudential regulation authority. The new tax relief changes have wiped off a significant avenue of profit for most buy to let portfolio mortgage landlords but still buy to let portfolios are still generating enough revenue for them to be a worthwhile investment.
If you are considering getting a buy to let portfolio mortgage then you may want to consider how to achieve this, what sort of buy to let mortgage lenders you may need to apply to or even better seek the services of a buy to let mortgage broker who will be able to assist you in getting a buy to let portfolio mortgage.
A buy to let mortgage broker may also be able to help you review your current buy to let mortgage portfolio do you can determine if your portfolio is performing at an optimal level.
You may also want to seek tax and independent financial advice from the relevant experts to ensure you have covered your basis when looking at a buy to let portfolio mortgage.
What are the new Buy to Let mortgage regulations?
There are some new buy to let mortgage regulations which affect portfolio landlords. They are broadly grouped into the tax changes and the buy to let mortgage underwriting changes.
Buy to Let tax bill changes
By 2021, all landlords will have to pay income tax on all gross rental income received minus allowable expenses. This change means that buy to let landlords are now going to be taxed on their turnover and not their profit.
The stamp duty changes also affected the buy to let market by increasing the amount of stamp duty tax buy to let landlords effectively had to pay.
PRA underwriting changes
One of the key buy to let mortgage regulations which came in that affects buy to let portfolio mortgages is the Prudential Regulatory Authority (PRA) mortgage underwriting changes.
The prudential Regulatory Authority (PRA) mortgage underwriting changes came in at the end of September and changed the way most buy to let mortgage lenders considered buy to let portfolio mortgage applications. A good example is the classification of buy to let portfolio landlords. To be considered a buy to let portfolio landlord you need to have four or more mortgaged buy to let properties.
This is a significant change as in the past you would have had to have multiple properties, usually under different categories such as leased student accommodation or House of Multiple Occupation (HMO) properties
This new Prudential Regulatory Authority (PRA) mortgage underwriting change means that when seeking an extra buy to let mortgage as a buy to let portfolio landlord you will be stressed tested on how you can afford an additional buy to let mortgage with your existing properties. Your experience as a buy to let portfolio landlord will also be important.
Buy To Let Portfolio Mortgages
Buy to let portfolio mortgages are now available through partnerships, SPVs or through private individuals.
A buy to let portfolio mortgage can be used to get a variety of buy to let properties rather than just a standard buy to let property. You can use a buy to let portfolio mortgage to get
houses in multiple occupation (licenced HMOs), student accommodation, blocks of flats and even commercial use property.
Can you get a buy to let portfolio mortgage with bad credit?
Getting a buy to let portfolio mortgage with bad credit maybe much harder due to the new mortgage underwriting guidelines brought in by the prudential regulatory authority.
You may be able to get a buy to let portfolio mortgage with bad credit but most buy to let mortgage lenders will assess your application on a case by case basis.
Most buy to let portfolio mortgage lenders will consider your application based on how long ago you had the bad credit issue, what it was and if you did anything to remedy the bad credit issue.
When considering buy to let portfolio mortgages, bad credit includes:
A debt management plan
A home reposession
Missed credit account payments
Low credit scores
No credit score and history
You should look to check your credit score with all four credit bureaus(including Crediva).
You can use a service like checkmyfile to check your credit scores with all four credit bureaus.
A bad credit mortgage broker may be able to help you get a buy to let portfolio mortgage with bad credit.
Can you get a buy to let portfolio mortgage on a non standard construction?
Getting a buy to let portfolio mortgage on a non-standard construction property may be hard, getting it on an ex council flat or a studio flat may also be hard.
If you have a non-standard construction property then you may want to consider getting a specialist mortgage broker.
Buy to let portfolio mortgage insurance
You may need a buy to let portfolio mortgage insurance if you have a buy to let portfolio. Getting the right buy to let portfolio insurance could save you so much money. Getting a buy to let portfolio insurance is also a way better option than having to apply for a buy to let property insurance on every one of your properties.
How to get a buy to let portfolio mortgage
Getting a buy to let portfolio mortgage isn’t complicated but you need to consider several factors as getting a buy to let portfolio mortgage although relatively straightforward can be complicated by the recent tax and regulatory changes.
A specialist buy to let mortgage broker may be able to help you get a buy to let portfolio mortgage
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.