Investment Property Loans In UK
Investment Property Loans in UK | The Landlords Finance Guide
Investment property loans in UK banks, building societies and other financial institutions cater for a wide range of financial circumstances, and there are some lenders that are known as 'specialist' lenders. What this usually means is that they cater for financial circumstances that are outside the norm or are less than perfect. In other words, they cater for people with impaired credit history who otherwise might have trouble getting access to credit.
Investment property loans in UK banks and building societies are also available, as many of them have specialist lending subsidiaries. What landlords need to know about investment property loans in UK specialist lenders is how they compare with standard buy to let loans. The key thing for landlords to be aware of when applying for investment property loans in UK specialist lenders is that they are likely to cost much more, as the interest rates are usually higher. This is because with specialist investment property loans in UK financial institutions, a loading is often applied, in line with the particular circumstances of the borrower. This can be anywhere up to a couple of percentage points on top of the standard variable or other interest rate.
Do You Qualify For A Specialist BTL Mortgage?
Of course what landlords want to know is what kind of circumstances qualify for specialist investment property loans? Simply speaking, any adverse credit circumstances can be considered. Sometimes people have defaulted on a credit agreement or may be in arrears. Both of these will be reflected on the applicant's credit record and may be one reason for seeking investment property loans in UK specialist lending providers. Sometimes, the matter has gone to court and there are County Court Judgements (CCJs) in the credit history. This is another reason to look for investment property loans in UK specialist financial institutions.
Other circumstances that might prompt people to seek specialist investment property loans are bankruptcy and individual voluntary arrangements (IVAs). With most specialist investment property loans in UK providers, bankruptcies must have been discharged for a certain period - the longer the period, the better the interest rate. Similarly, IVAs must have been carried out satisfactorily, usually for at least a year.
In most cases, specialist investment property loans increase the interest rate for BTL mortgage products depending on the number of adverse circumstances that apply to the applicant. So someone with a couple of arrears is likely to pay a lower interest rate than someone with defaults, CCJs and an IVA. Those variables aside, investment property loans in UK specialist lending providers work much the same as other BTL loans. There is still the requirement for rental cover, though some specialist lenders may set this as low as 100 per cent. And there is still a range of fixed rate and tracker BTL mortgage deals. There are several lenders for landlords to choose from in the specialist lending sector. Providers of specialist investment property loans in UK financial institutions include UCB Home Loans, The Mortgage Works, GMAC-RFC and many others.
