Are you a buy to let portfolio owner? Do you even know if you are classed as one? Well a buy to let portfolio owner is defined as a landlord that already has four or more buy to let properties that are mortgaged, separately or together according to the Prudential Regulation Authority (PRA). If a limited company owns the properties the same definition applies.
So if the definition applies to you then you need to be prepared to supply a great deal more information when you make an application for a new mortgage than you would have to if you were not classified as a buy to let portfolio owner. Does this mean that you are less likely to obtain the mortgage? Not necessarily.
What information will you need to supply as a Buy to Let Portfolio Landlord?
To have the best chance of obtaining a new buy to let mortgage if you are already a portfolio landlord you must provide the lender with the right information. Everything needs to be prepared before you make your mortgage application so we have provided a handy reference for you here to make sure that you have everything to hand.
You must prove that you are who you say you are
Making mortgage applications using false names is something that you must avoid. You may think that this is strange but people do these things out of desperation. You will never get another mortgage if you do not prove that you are who you say you are. The best way to prove your identity is with a driving license or passport. Provide both if you have them.
The next step is to provide proof of your address. Again it is not a good idea to provide false information here. Provide your lender with a current bank statement, a recent electricity, gas or telephone bill or a council tax bill.
Be sure to include your tax returns for the last 3 years with your application. If you have an online account with HMRC you can easily download these. If you do everything manually then provide copies of previous returns.
Also provide recent SA302’s from the HMRC. These are the tax calculations performed by HMRC after you have completed your self assessment returns. You can also obtain these online from your HMRC account.
Provide a bank statement for the last 6 months so that the lender can see how you have been managing your money. If you have more than one bank account then you will need to provide statements from all of them.
Provide a spreadsheet which shows your entire portfolio of buy to let properties so that the lender can make an assessment about your commitments and overall borrowing. Be sure to identify each property, the rental income, any outstanding mortgages and so on.
If you have income from elsewhere then provide evidence of this in the form of pay slips, share certificates, pension statements etc. The lender will take all income into account when considering a borrowing amount.
Business Plan and Cash Flow
Provide a business plan for your buy to let portfolio business. Explain the type of properties that you purchase and how you buy them. Be sure to include an exit strategy in your business plan.
Support the business plan with cash flow forecasts which include any cash reserves for void periods, cost of maintenance and repairs, monthly income from the properties, other costs and a contingency fund if you have one.
Use a Specialist Broker
Use a specialist broker if you are a buy to let portfolio owner looking for a new mortgage. Not all lenders will be interested in providing a new mortgage in this situation and a specialist broker will have access to lenders that can help.
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