This follows on from last week’s increase in the maximum loan amount per transaction which was raised to £500K from £350K.

Lender arrangement fees will now be added to loans on all products in the Keystone range, including multi-units and HMOs, allowing borrowers to reach a genuine 75% LTV for all property types.

The rental calculation is now based from 130% of the pay rate across the full product range, based on the loan value net of added fees. This is a marked improvement on the previous requirements for the discounted rates of 100% of the reversion rate + a minimum margin of 3%; to put the new criterion into context, when applying for a discounted rate mortgage for a standard property, on a monthly rental income of £1,000 it will be possible to borrow up to £185,000 (subject to all the lending criteria) against a maximum of £145,000 based on the previous rental income requirement.

From today, Keystone will also accept applications relating to property with corporate leases to PLCs, local authorities and some housing associations as long as the leases are on a full repairing and insuring contract up to a maximum of five years.

Other lenders and brokers had already been approached. Initially we gave an overview of the lenders that had offered finance and outlined the positives and negatives to the loans and the lenders.

As the repayment was to come from the sale of the property we considered lenders that would offer extensions to the loan if the sale took time. Cost was also important and knowing that the lender had the money to complete

Due to our experience in the sector and detailed knowledge of the lenders we were chosen to source the finance and the client obtained a 12 month loan ,interest calculated on a daily basis with no exit fee.

The house is on the market and they now own a very profitable business.

They were currently relying on  private investor funds and had no finance against the substantial debtor book.

Lenders were approached by both the company and its auditors and a facility of £2.5m had been offered with a personal guarantee from a minority shareholder. We were then contacted by their accountant.

It was clear from talking to the director that with their plans for growth the facility offered was totally inadequate

We sourced two alternative lenders  who were happy to offer an invoice discounting facility of £6m and after lender interviews one was chosen. We also negotiated a significant reduction in set up fees ,no requirement for a guarantee and lower fees when turnover hit specific levels.

We are also offering support to the company to ensure that reporting to the lender is done accurately and on time.

Whilst this made it difficult and excluded most lenders from our panel we found two that were willing to lend the money. We spoke  directly with the underwriters rather than a business development manager and argued that the client’s profession of a building surveyor gave him the necessary skills to manage a property and he had previously owned a residential property.

His credit file was good and he enjoyed a high salary that covered the reapyments to the loan.

By highlighting the risks to the new lender and balancing these with the strengths we gave them the comfort they needed. Indeed one of the lenders who agreed it had previously declined it  when the client had approached them direct.

We obtained 70% of the valuation over a 20 year term and he has received his first quarters rent.

Our client had already purchased the historical building and invested his own funds and required funding to finish it off. As it was partly built this put the banks off so we arranged a short term development loan.

By visiting the property and surviving a climb up a vertical ladder we were able to present a compelling case to the lenders. The finance was paid out in stages against the valuation of the building to reduce the developer’s costs and completion of the twelve apartments is due by the end of the year.

The property will be very much a land mark development and we are currently negotiating a long term loan with lenders to repay the bridging loan and release further capital.

A 10% deposit had been paid at auction and we had less than two weeks to obtain the finance. The buyer was very anxious about losing the deposit and being sued by the seller.

The property was almost derelict and was putting the lenders off. We found out early on that the family were wealthy and had other assets including a profitable hotel which was available as security.

We approached several of our lenders and we met with the owner of the bridging company chosen and gave a presentation to them which explained the transaction in detail and outlined all the risks. Due to this they didn’t want a valuation and the money was released the day before the deadline.

We negotiated the ability for the business to reduce the debt during the period of the loan to lower interest costs and the house is now being restored and will be back to its former grandeur in the Derbyshire countryside.

The product range is aimed at both individual and limited company investors who already own at least one residential investment property. The range includes a selection of fixed and discounted rate buy-to-let mortgages for vanilla, HMO and multi-unit property.

As a partner of MFB we can;

• Get direct access to decision makers and directors
• Support and assist you from the initial enquiry to completion
• Provide independent advice to you
• Identify if your request meets their criteria
• We work for you and not the lender
• By completing the application this maximises the chances of you obtaining the funding

For more information 

To most people a 15 year loan is a long term agreement.Providing the payments are made and there is no action of default it’s there until it’s repaid.Well think again.

We are seeing more and more existing loan agreements being used by the banks to increase interest rates,withdraw facilities,bounce items on separate accounts and arrange new valuations.Some of these reasons are valid due to changes in financial circumstances for their customers but others are not. Three clauses to watch out for;

• On demand clause-Common in overdrafts where the bank’s security fluctuates.But are also in some loan agreements.This gives the bank the right to request repayment  whenever they want.This clause is not used by all the banks so you need to look at alternative funders as it weakens your position;
• Revaluation clause-Some banks are using this now as valuations have dropped to increase rates,enforce reductions or manage the loan away.Due to your circumstances this may not be possible.Some banks are more pragmatic than others when faced with this situation;
• Cross Default-If you miss a payment on a loan and you have others with the same bank then all of them can be renegotiated.Ensure that if you do miss a payment that you pay it quickly other this clause may be enforced.

If appropriate notice is given this gives the bank customer time to look for alternatives .To bank managers please take note on this point.It makes a difficult situation for both parties much easier.

Please take independent legal advice on any loan agreement and talk to an independent broker as they will know how the different banks behave.

HMO,Limited Company,Single Freehold,Bed-sits,Commercial Investment can all be funded.As well as the usual buy to let mortgages.

We are one of the few brokers who have direct access to Aldermore Commercial,Paragon and Shawbrook Bank.

Use your valuable time in building your portfolio whilst we source the finance for you.

• Fixed Fees
• 3-6 month trial period so you can walk away without penalty if the lender is not for you
• Cash back towards exit fees for businesses wishing to go to another provider
• up to £5k towards additional accountancy services-subject to terms and conditions

So if you have a factoring or invoice discounting facility and want to move,now is the time to do it.

Then why not use our specialist property panel.

We are one of a few brokers in the UK that have direct access to Aldermore,Kensington,Kent Reliance,Paragon and Whiteaway Laidlaw Bank.

HMO,Limited Companies,Student Lets,Single Freehold Blocks,New Build Apartments

Contact us now to see how we can help you build your portfolio.

I was recently invited to a property networking group and it was standing room only. There were some very good speakers and the audience was a mixture of established and potential landlords. The event was organised by one of the better networking groups but it was no surprise that the many negative aspects of BTL were not touched on. All I heard at the break was sellers talking about discounted property and buyers wanting to put minimal money into a loan. Where are the seminars talking about all the issues and pitfalls of being a landlord?

A lot of lenders are basing the amount of the loan on the low introductory rate. In 1 or 2 years when this expires many landlords will automatically be outside the the rental ratio. Why do the commercial lenders work off approximately double that? Do they know something that some landlords are not thinking about? Of course they do, sooner or later rates are going to go up and they want to ensure their customers can afford it.

There is much talk about regulation for BTL mortgages but should new landlords take some kind of assessment on their knowledge before they enter the industry? The NLA and RLA offer excellent training courses and ongoing education. These are very much aimed at the professional landlord but should we build on this expertise?

Whilst most landlords have surplus cash at the moment, please maintain your properties well to reduce voids, ensure you do the right tenant checks. But just as important start saving now; not for a rainy day but when base starts to go up. With base at 0.5% and lenders rates at c 5% that’s a 4.5% difference. What will they be when base is 3%?

When we do our fact finds for BTL mortgages for new landlords we talk about voids, Safety Certificates, the phone call at 2 in the morning to change a light bulb, when to issue a Section 21 notice, landlords insurance etc.

Being a landlord can be very rewarding but make sure the time and effort you put into your properties is for your benefit and not the lenders.

Over the past month, we have seen an increase in the number of buy to let mortgage enquiries for Limited Company applications as well as HMO and multi-let properties.  Whilst not all meet the lenders criteria, many have positive aspects which appeal to the semi exclusive lenders we have access to. Please feel free to contact us if you require finance for your portfolio.

During this month’s review of the main banks there is no sign of any return to property lending from the ones that are shut and there have been increases in rates from others.

The most common loan to value in the buy to let market is 70% but 75% -85% are available. Whilst rates are still low it makes sense to start putting money away for future increases. Whilst it may not happen until 2012 it’s not if but when.

More lenders are pricing loans above 3 month LIBOR and since 1^st August it has increased from 0.83% to to 0.88%. Compared to a loan over base rate this is an additional £32 per month per £100,000 borrowed. Something to remember when setting rents and comparing the products of lenders.

More lenders are expected to enter the market later this year/early 2012 which can only be good news; but also it makes it more difficult when deciding which lender to choose.

Through our buy to let sourcing software we can assist you with this.

The good news is that rates and fees are coming down and there are more products in the market place.Bad news is that TMW have withdrawn from the limited company market which leaves only three lenders who have a strong appetite for this business.

If you are new to Buy to Let please bear in mind that setting up a limited company may have tax advantages,obtaining finance is more difficult and can be more expensive.Talk to a good accountant who understands the sector.

Through the alliance, Barclays SME customers will be able to obtain asset finance products funded by ING through their bank just months after it announced it would no longer provide asset finance for businesses with a turnover of less than £5m.

The agreement will run as a three month pilot in eastern England after which both parties will assess the success of the project.

Whilst this reopens the door for asset finance enquiries from their  customers  it should be noted that by going to an independent finance broker they will have access to ING and all the other providers.

Credit policy of bank says money has to be used for business use.Whilst I fully accept there has to be credit policy haven’t you heard of exceptions? The loan to value was low and the profitability of the business was excellent.

Good to see bank manager looking after his client by offering an alternative and I could almost see his frustration oozing out of the phone.

The bridging company was putting pressure on the client for repayment.We quickly sourced an alternative lender and repaid the bridging loan.

Interest Rates c 9% per annum

From £25,000 to £100,000

Criteria

• Limited Companies only
• 2 years accounts must be available.
• Contact us now for pre- approval
• Guarantees may be required

Provided consultancy advice t client which reduced number of returned items and provided time for the client to change banks.

Based upon previous track record and his professional team a loan of !00% of build costs and fees was agreed.

The number of new clients we have seen over the last quarter who have been told to go by their banks is at an all time high.I have seen 40 year connections told,please repay we don’t want you any more.If you have long term funding agreed you will be all right as long as you don’t go into default.

The problem is with loans that are on an interest only basis with repayment due this year.With one bank you have to be able to prove serviceability at a rate of 11% and that’s after they’ve deducted 30% off your rent!

It’s important you have a manger who understands property,has a good reputation within the bank and is clear and transparent about credit policy.The more notice you have the better it will be.

Thankfully there are banks that are still open for business,more are coming back into the sector at £1m+and more are planning a return.

A factoring facility was set up within a week with an independent factor which funded the sales ledger, generating the requisite funding and allowing the company to continue successfully.  The bank relationship was preserved.

Strong positive goodwill was created on the back of the new bank finding a way to further assist the group of companies.

Agreed over a nine month term which was sufficient time to sell or remortgage further units without the pressure of distressed sales.

Provided additional working capital to the directors  without the need for outside equity.