Portfolio Landlords - Frequently Asked Mortgage Questions

We're going to be a bit biased with this but very few people will create a portfolio without getting advice because if you're buying properties you have to plan.

See video transcript

Hi everyone it's the boys from Crescent Mortgages here again Dan and Kye coming to you with another one of our "FAMQ's"
frequently asked mortgage questions. Today we're going to be talking to you about portfolio Buy to Let mortgages now it it's a topic which could be quite complicated if we start to get into all the finer details but we're just going to skirt over the basics just the common things that people don't understand and of course any questions or feedback just leave them in the comments and as always if you can subscribe to our channel um you can tune in for more helpful videos

so what is it for? Me to start with yeah I think I think you start this one. What is a portfolio landlord so generally the rule that you'll see is four or more mortgaged properties, that's the phrase you'll see, so do you have four properties and are they mortgaged? To be honest most lenders even if they're not mortgage will count, so do you have four properties that are let out? Yeah, if you're applying for either a purchase or a remortgage and on completion of the mortgage you're going to have four or more whether that's the three that you already own and the fourth one that you're buying or if you already own four or more and you're just remortgaging any one of them you fall into the portfolio landlord category now how does that impact them Kye? It changes a lot of the criteria, it makes things in places harder, in some places easier, but there is more to think about and the the regulation. Easier?Yeah, in some places it does, some of the income requirements disappear for portfolio landlords. Do they?

It's my area I've got this one but the the main difference is that they assess the whole so when you buy a Buy to Let property normally, if it's your first one or not more than four, then each one is assessed on its own merit when you have a portfolio or classed portfolio they now look at it all the combined rents as well as the individual rent the combined values the combined loan to values which we explained the video recently, all those sorts of things they're putting a picture rather than just painting one individual scenario. They're doing a lot of painting there aren't they? They they get very artistic with the regulations. Yeah they do, we should highlight that a few years ago these portfolio regulations didn't exist so it didn't matter if you had 20 Buy to Let properties in the background, didn't matter how they were performing whether they were you know really not doing very well for you not receiving much rental income, the lenders would just look at the new buy to let property that you were purchasing to decide whether you met their criteria so it was obviously quite quite straightforward, whereas now they are looking at all of the properties in the background which means that if that portfolio isn't performing very well, the rent's not very good, not just against the mortgage but with a stress test that they run then it could actually impact your ability to buy that new property even though it is in no way connected with the background portfolio. I think the biggest thing for me when you're you're looking at a portfolio, and most people will do this anyway, is you really do have to speak to brokers in that scenario. We're going to be a bit biased with this but very few people will create a portfolio without getting advice because if you're buying properties you have to plan, you have to know if I buy this one and I get this much mortgage can I still buy another one, and that's the conversation you should be having you know your mortgage broker is a lot more important normally than they maybe are. Don't do it without talking to us, under no circumstances. I think that's a big one but they can be done very well and very creatively but you sometimes have to think of it differently.

I've enjoyed that one Kye. I'm just trying to think what else is bad about them, other than that you get a few more tests it's a bit harder maybe in places, but you have less lenders to deal with I suppose, yeah that's one thing a lot of high street vendors won't touch portfolio lending so if you're if you own four or more buy to let at the point that this new one is completing then a lot of lenders just aren't going to do it you might go and speak to your own bank they may just say no so it's it's not the most specialist but it is quite specialist lending there's only certain lenders that will do it but those lenders like I say a lot of them will specialize in it, it's their bread and butter what they do. Interest rates can be a little bit higher than the high street sometimes not always, but again we'll obviously explore the market to make sure we get you the best rate. Get in touch I think is the important one there. Any portfolio landlords at home, you struggled to get a mortgage in the last three, four, five years since regulations came in from your legacy properties if you tried to remortgage, and now you can't. We would be interested to know if you organized and bought your portfolio before the regulatory changes a few years ago, everything was fine, are you now finding it difficult to remortgage those properties now that they brought in the portfolio regulations? Really interested to hear your views, leave them in the comments and obviously subscribe to the channel and we'll see you next time, thanks a lot.

I'm getting good