Most landlords have at some stage needed to arrange finance and depending on their circumstances this can have different levels of complexity. There is a difference between a single buy-to-let mortgage, finance for an HMO and a property portfolio.
Residential mortgages for personal use work are straight-forward, time consuming and a real nuisance to obtain, but you know in advance what you can get. Banks advertise their different mortgages products, so, you quickly are able to see what the available terms are – the interest rates, the amount you can borrow, and what the monthly payments over a set period will be.
Commercial finance is a bespoke service, so lenders do not advertise their terms in advance. They decide how much they are willing to lend, and on what terms they are willing to lend it to you, based off a variety of distinct factors. These can include your LTV, and the amount of rent received, but can also include factors such as your experience as a property owner, and other income or security which you may own.
Whilst some lenders do advertise selected products for simple buy-to-let mortgages, if you are looking at an HMO, holiday let, or have several properties, the number of options which are available to you may vary. Approaching the right lender, and in the correct manner, may influence the type of finance which you are able to get.
If a landlord has a small portfolio of properties, it may be possible to use some of the properties as security for the others, which can help raise additional finance to grow the portfolio, or refinance and reduce existing loans.
If you are unsure about your financial possibilities, and what may be available to you, ASC is always happy to help.
