Portfolio landlord policy and Lending criteria

The Definition

Portfolio Landlords or landlord, are those are commercially involved with property either with one or many properties mortgages or un-mortgaged. These types of mortgages are known as Buy to Let rental mortgages which are commercial mortgages rather than residential.

These mortgages includes properties by limited companies (LTD), Holiday lets, or those who have a 'Consent to Let' to let their properties out are also included. These mortgages can also be owned, named solely or jointly with a partner or spouse.

Direct mortgage lenders currently accept buy to let mortgages from portfolio landlords with at least one buy to let property and have at least, two years of letting experience in order to facilitate a mortgage application and exclude foreign properties.

Affordability assessment

All new mortgage application will be assessed and underwritten in order to customers are able to meet their mortgage capital or interest repayment.

The assessment also covers the landlord's portfolio to ensure that all properties in the portfolio can sustain the Interest Cover Ratio (ICR) and Loan to Value (LTV). The ICR of a mortgage is the minimum ratio between the expected or current rental income of the property to purchase or remortgage, and a notional interest rate.

The rates Work with a minimum of 5.5% Interest Cover Ratio (ICR) . That is the minimum you’ll need to account for. Your property rental margin: Depending on your tax band, use the higher rate tax rate of 145% margin for your rental income, and 125% for basic rate tax payers.

Mortgage Packaging Applications

All Landlords must provide the following as accurate as they can be:

  • Three months bank account statements showing income and rental income.
  • Source of funds with proof.
  • Property Schedule form
  • Property Information form
  • A business plan if you own 12 or more properties.