The buy to let mortgage sector and commercial mortgage rates have entered a new era. Any landlord who has four or more mortgages on properties that are buy to let are now treated differently when applying for new mortgages. So, how are commercial lenders such as High Street banks interpreting the new guidelines set out by the PRA.
An example that springs to mind is the treatment of so-called portfolio landlords. These landlords have a mix of mortgaged properties that can range from commercial, to semi-commercial and buy-to-let. Since 2008 and the credit crunch, lenders have always investigated each and every application made for a new mortgage. Such investigations would include a look at how a new mortgage would add stress to an already existing portfolio. This long-standing approach is now seen as little more than common practice. Lenders are now no longer being accused of being picky.
Commercial Mortgage Rates : How New Rules are being Applied
Lenders for portfolio landlords have somewhat amended their application forms. These small changes have been made to ensure that there is an appropriate audit trail,. Also to ensure that the correct background checks are being made. So, what happens for new commercial mortgage applications?
If you are applying for a commercial mortgage for the first time, be prepared for the lender to do a land registry search. A land registry search will ensure that all the property details are correct, as listed. Any discrepancies found will be investigated. One such discrepancy that is often found is when a freehold house has been converted into a HMO.
When assessing you for a mortgage, they will also look into your aggregated borrowing. This will include a corporate as well as personal assessment. You will be asked to provide details on any debts you have secured against properties you own, as well as personal debt. An in-person meeting can save time and effort, your bank manager then taking your application, and all other information gathered. A report will be compiled. The credit committee will then make a decision depending on all information that has been made available.
Commercial Mortgage Rates : The Future
All in all, the new rules may not make much impact, but in the future, serious investors may change their strategies. They may look to just one or two of the top commercial lenders when looking to finance new properties. This may incur a higher price, but this will be offset by the service received.
When in search of the best commercial mortgage rates, as a portfolio landlord, or a first time investor, Mortgage Style is here to help. As independent mortgage specialists for all types of mortgage, both residential and commercial, we can find the best solution for your individual lending needs. It is important to fully understand the new rules set out by the PRA. Once again, that is where we can help you. We can help your commercial property investments run smoothly. We will alleviate the added stress of investigations you may not fully understand.
More Help and Information from Property Style
If you are looking for a commercial mortgage, Mortgage Style can offer you impartial advice and the most competitive rates on borrowing. We cover Bristol, Exeter, Plymouth, and the surrounding areas and specialise in the buy-to-let market . For more information and advice, give us a call on 01275 370360 or 0117 907 0818 or fill out a contact form to discuss your individual requirements.
Tags: Commercial Mortgage Rates
Categorised in: Mortgage Advice
This post was written by Marcus Robinson