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  • Stamp Duty Land Tax surcharge may cause more problems than it solves says CML | Mortgages for Business
    of a 3 surcharge on Stamp Duty Land Tax SDLT for second properties urging reforms to its implementation plans and warning that the surcharge may cause more problems than it solves The CML believes that forthcoming changes in tax relief and potential macroprudential interventions in the buy to let market are already set to slow buy to let activity The additional introduction of a SDLT surcharge could well dampen investor enthusiasm to the point where the availability of private rented property is reduced without necessarily increasing the opportunity for households to become home owners the council warns Currently around a fifth of households rent within the private sector and the CML s view is that there is a real risk that the SDLT increase could result in landlords charging higher rents Ultimately this would make it more difficult for tenants to save enough capital to allow them to get on the property ladder which is the reverse of what the Treasury hopes the change in policy will achieve The CML s suggestions are as follows Under current proposals some people will be caught by the requirement to pay the 3 surcharge even when they are buying their main residence for example if they have a short term overlap between owning their previous home and acquiring their new one perhaps as a result of problems in the housing chain so it would be better to allow people to defer their payment of SDLT for 18 months subject to conditions rather than require them to pay it upfront and then potentially reclaim it in the form of a rebate This would be both fairer and more efficient The government should clarify whether its policy intention is to favour institutions facilitating new build activity or new build activity more generally If the policy

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/february-2016/stamp-duty-land-tax-surcharge-may-cause-more-problems-than-it-solves-says-cml/ (2016-02-16)
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  • Keystone streamlines Classic Range and reduces rates | Mortgages for Business
    Mortgage Product Index Buy to Let Mortgage Costs Index Limited Company Buy to Let Index Property Investor Survey Money Markets FAQs FirstRate MFB TV Helping brokers with Buy to let mortgages Commercial mortgages Property development finance Bridging short term finance Case processing BrokerBusiness Case Studies Consulting Buy to Let Lending Mortgage Flow Published Research News Insight Buy to let mortgages Commercial Mortgages Property Development Finance Bridging Short Term Finance Residential Mortgages About Meet the team Our approach Awards Testimonials Careers Contact us 0845 345 6788 Share News Insight Keystone streamlines Classic Range and reduces rates 01 02 16 Written by Jenny Barrett Keystone Buy to Let Mortgages has streamlined its Classic Range to make product selection more straightforward for brokers and landlords All rates will now be made available to both individual and limited company borrowers where previously there were product sets for each Classic Range rates have also been reduced by 20 50 bps Commenting on the modifications David Whittaker managing director of Keystone said Although our general strategy is to offer products that are criteria rather than price led we do acknowledge that landlords face higher costs going forward In collaboration with our funding partner Paratus AMC we have worked out a way of absorbing the additional costs associated with underwriting limited company applications so we can offer the same rates to all borrowers for the time being Unlike the majority of buy to let lenders Keystone accepts trading limited companies as well as Special Purpose Vehicles The Classic Range now offers a selection of term trackers and fixed rates to 80 and 75 LTV for standard buy to let property as well as 75 LTV options designed specifically for HMOs and multi units Pricing starts from 4 29 fixed for three years to 75 LTV Mr Whittaker

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/february-2016/keystone-streamlines-classic-range-and-reduces-rates/ (2016-02-16)
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  • Premium for Ltd Co BTL products is very modest | Mortgages for Business
    figures Commenting on the findings Simon Whittaker finance director at Mortgages for Business said Underwriting applications from limited companies does involve more time and effort When you underwrite an individual application you check out the individual When you underwrite a limited company application you check out the company and the individual The premium added by some lenders to these products is very modest and only covers the increased costs involved although it s interesting to see that in the current highly competitive market a few lenders have decided to absorb the costs themselves instead of passing them on to the borrower The index also found that in Q4 swap rates saw a modest reversal of the downward trend witnessed since the summer but already in Q1 2016 there has been a lurch back downwards helping to keep pricing low Bank Rate too is unlikely to rise any time soon due to decelerated growth in the UK and current state of the global economy Another factor relevant to the future costs of buy to let borrowing is the stance of the Financial Policy Committee which feels that existing affordability metrics place BTL borrowers in a more vulnerable position to unexpected rises in interest rates or falls income It believes that rates of credit loss on buy to let loans has been twice those incurred by owner occupiers since 2010 HM Treasury Open Consultation Financial Policy Committee powers of direction in the buy to let market Section 4 Disputing the claim Simon Whittaker said Write offs on buy to let mortgages since 2009 have averaged less than 0 2 p a and are currently 0 1 p a having peaked in 2011 12 at around 0 3 p a Any rational person would realise that when lenders typically operate on a Net Interest Margin for BTL lending of at least 2 p a this represents a loss that should be readily affordable The reality is that only in two quarters in 2009 were arrears higher on buy to let than on residential mortgages and thus by that measure buy to let is less risky than normal residential lending The danger is that the Bank of England may seek to impose constraints on buy to let lending which could simultaneously reduce the supply of mortgages and push up the cost of them Mr Whittaker expects that lenders will lobby hard to correct the misunderstandings and hopes that the Bank will wait for the effects of the various tax changes to come to light before taking any further action on the buy to let sector When looking at buy to let mortgage products by initial term the index found that although absolute product numbers in each category rose there was little change in market share Two year rates still accounted account for 43 of all products although they have lost ground consistently to five year rates over the last two years Five year rates now account for nearly a quarter of all buy to

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/premium-for-ltd-co-btl-products-is-very-modest/ (2016-02-16)
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  • How do Ltd Co BTL applications differ from individual applications? | Mortgages for Business
    Buy to Let Lending Mortgage Flow Published Research News Insight Buy to let mortgages Commercial Mortgages Property Development Finance Bridging Short Term Finance Residential Mortgages About Meet the team Our approach Awards Testimonials Careers Contact us 0845 345 6788 Share News Insight How do Ltd Co BTL applications differ from individual applications 27 01 16 Written by Gareth Richards Gareth Richards consultant mortgage broker at Mortgages for Business answers some of the most commonly asked questions from brokers about the buy to let mortgage application process for limited companies Q Does it take longer to process a limited company application A Yes I think it is safe to say you should allow for extra time Generally applications by individuals and newly established SPV limited companies take a similar time to process as the background checks are only carried out on the individual applicant director s of the SPV However SPVs with existing properties and trading limited companies will take slightly longer as checks will need to be carried out on the individual and the company The underwriting for limited company applications also tends to follow more of a manual process which of course takes longer Q What are the common hold ups A If we are to see hold ups these are normally at post offer stage With limited company applications both the lender and borrower require separate legal representation so unlike an individual application there is more than one solicitor involved which tends to slow things down Q Will my client have to provide a personal guarantee when taking out a limited company buy to let mortgage A Yes All Limited Company lenders will require that the directors and potentially majority shareholders provide 100 personal guarantees Q SPV or Trading Limited Company Does it matter A According to our buy to let mortgage calculator and rate finder today there are 158 products available to SPV limited companies at present and 50 available to trading limited companies so from a choice perspective purchasing via an SPV is definitely the route to go down Lenders prefer Special Purpose Vehicles occasionally referred to as Special Purpose Entities as they pose less risk and are easier and quicker to understand and underwrite The borrowing itself is guaranteed by the directors shareholders so if there was an issue with payments and the lender had to repossess the property and after sale they are still owed money those offering the personal guarantee would be liable for that From an application perspective SPV limited companies also tend to complete more quickly Trading Limited companies take longer to process as they tend to be more complex and involve a higher level of underwriting Q Are there any extra costs involved for borrowers Unfortunately yes but often these are outweighed by the tax savings You clients will need to consider Solicitors fees for limited company applications both the client and the lender need separate legal representation so two lots of solicitor s fees must be paid Increased rates

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/how-do-ltd-co-btl-applications-differ-from-individual-applications/ (2016-02-16)
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  • Support for buy to let borrowers as banks revise policy criteria | Mortgages for Business
    News Insight Support for buy to let borrowers as banks revise policy criteria 26 01 16 Written by Jeni Browne Major high street banks Santander Barclays and NatWest Bank have all announced changes in policy criteria with the aim to further support first time buyers and customers looking to invest in buy to let property Santander has cut interest rates on its buy to let and residential mortgages by 15 basis points The lender has reduced its previous rate of 2 84 on its buy to let 75 loan to value LTV two year fixed mortgage to 2 69 with a 1 995 arrangement fee purchase and remortgage or to 2 49 with a 1 5 arrangement fee purchase and remortgage It has also canceled its two year fixed rate products with the arrangement fee of 995 With regards to its residential offering the bank has launched a 60 LTV two year tracker at 1 39 with a 995 arrangement fee purchase and remortgage Santander has also cut the rates on its 75 and 80 LTV two year trackers by 15 basis points and has withdrawn its 70 LTV two year trackers Paul Adams head of intermediary distribution Santander said Buy to let continues to be a core business priority for us We want to grow our business and support customers looking to invest in property make that ambition a reality We hope these competitive new reduced buy to let rates combined with our efficient service and quick time to offer will help customers keen to invest in property take that step Barclays Bank is also reviewing its buy to let offering and following an increased demand for buy to let mortgages from customers over 50 the bank has increased the age cap on its buy to let range from

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/support-for-buy-to-let-borrowers-as-banks-revise-policy-criteria/ (2016-02-16)
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  • A positive perspective post April | Mortgages for Business
    have gone up and down as you would expect over the last ten years did I mention that the housing market is relatively stable compared to the volatility of the stock market sitting at 5903 points in December 2015 against 6586 in December 2005 and thus down 5 5 So in terms of an investment return property outperformed the others and this isn t taking into account any return on your buy to let investment in terms of rental surplus I then thought I would do a bit of maths particularly looking at the stamp duty changes to see how much worse off landlords will be on post April completions So lets compare costs from 2 years ago and now assuming someone is buying a buy to let for 220k and borrowing 75 When Lender Rates Type Monthly interest Interest over deal period Arrangement fee Stamp duty Total cost over deal period 2014 TMW 3 64 Fixed for 2 years 568 70 13 650 1 999 2 200 17 850 Now TMW 2 79 Fixed for 2 years 383 62 9 207 1 999 8 500 19 706 2014 TMW 4 99 Fixed for 5 years 686 12 41 167 999 2 200 44 336 Now TMW 4 09 Fixed for 5 years 562 45 33 747 999 8 500 43 241 So as I see it although the stamp duty is 6300 more than it was two years ago the reduced cost of borrowing now does help to soften this blow and actually as it stands from April on a 5 year deal you work out better off Now to run the same numbers but for borrowing through a Ltd Co as this will be the way to help mitigate the tax relief issues When Lender Rates Type Monthly interest Interest over deal period Arrangement fee Stamp duty Total cost over deal period 2014 Paragon 3 75 Fixed for 2 years 515 63 12 375 3 300 2 200 17 875 Now Paragon 3 70 Fixed for 2 years 508 75 12 210 2 475 8 500 23 185 2014 Paragon 5 49 Fixed for 5 years 754 86 45 292 3 300 2 200 50 792 Now Paragon 4 30 Fixed for 5 years 591 25 35 475 2 475 8 500 46 450 Now I absolutely appreciate that different purchase prices and loan amounts will produce different figures and I also acknowledge that between 2014 and now stamp duty was changed But what we can clearly see is that comparing where we will be in April to where we were 2 years ago its not as bad as it would initially seem And actually if you buy through a ltd Co and take a 5 year fixed you would potentially stand to be significantly better off to boot Diary of a Buy to Let Purchase 2 12 2015 Part 1 It was that or a Range Rover 4 12 2015 Part 2 I ve made 800 already

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/a-positive-perspective-post-april/ (2016-02-16)
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  • Diary of a Buy to Let Purchase Part 10 - The silence is deafening | Mortgages for Business
    a copy of the fixtures and fittings list It always amuses me that the vendor has to confirm they are leaving the light switches behind Surely people don t actually take these with them I guess that they must otherwise it wouldn t be on the list Anyway I had a look through the list and the light switches are staying as is the underfloor heating bonus and the washing machine So I am happy And that s all NO OTHER PROGRESS In the spirit of being proactive I decided that I needed to get to grips with the tenant staying on and how this is all going to pan out Now I believe my solicitor will get a copy of the tenancy agreement and sort out getting this transferred to me so that s good However what I need to do is find out who the current tenants rents through and then sort out our arrangements going forwards At the moment I have no idea if it s directly with the vendor or through an agent Tenancy Deposit Scheme I must admit this tenant deposit scheme makes me slightly nervous Who has the deposit now when will it be transferred where on earth will I put it if I am not using an agent etc I phoned the letting agent to ask if the vendor would get some further information for me so I can start sorting this out They were very helpful and said they would come back to me A week ago And still nothing Now being honest this type of thing irritates the life out of me and the end of March deadline is looming yes I have two months to complete but nearly a month has gone by and I can t say that I have seen anything like tangible progress So my plan is that if the agent hasn t come back to me by the end of this week I am going to give them a rocket up their sales particulars Let s see where that gets me Diary of a Buy to Let Purchase 2 12 2015 Part 1 It was that or a Range Rover 4 12 2015 Part 2 I ve made 800 already and I haven t got the mortgage yet 7 12 2015 Part 3 The demise of Nathaniel Pig 8 12 2015 Part 4 Call off the dogs 11 12 2015 Part 5 bank account 17 12 2015 Part 6 Business bank account interview or Center Parcs 21 12 2015 Part 7 Reality bites 29 12 2015 Part 8 The method behind the madness 12 01 2016 Part 9 Join me in a buy to let fist pump 16 02 2016 Part 11 Throwing toys out of prams You might also be interested in 27 07 2015 Buy to let from personal to limited company ownership Prior to now when asked by clients whether buy to let properties should be bought in their own names or whether

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/diary-of-a-buy-to-let-purchase-part-10-the-silence-is-deafening/ (2016-02-16)
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  • January sees UK lenders launch raft of new and revised products | Mortgages for Business
    News Insight January sees UK lenders launch raft of new and revised products 25 01 16 Written by Jeni Browne A highly competitive market and changes in taxation policies prompt Shawbrook Bank Precise Mortgages and Coventry for intermediaries to launch revised mortgage offerings A new limited company buy to let mortgage product is now available from Precise Mortgages The product is on offer for loan sizes of up to 3 million at up to 80 loan to value Rates start at 4 09 Applicants can have up to 10 loans with Precise Mortgages up to a maximum of 5 million and can also own unlimited properties through other lenders The maximum loan term is 30 years and the maximum age at application is 80 years of age Alan Cleary managing director at Precise Mortgages said Changes in the taxation of buy to let properties may result in more professional landlords using a Ltd Company structure Therefore we have launched this product to help intermediaries meet the needs of their customers Precise has also recently announced that it is entering into the government Help to Buy scheme Help to Buy Almost Prime products start at 3 55 up to 75 LTV for a two year tracker Two year fixed rates start at 3 95 while its four year fixed rate is available from 4 20 Help to Buy Near Prime products include a 5 05 two year tracker a two year fix from 5 45 and four year fix at 5 70 Meanwhile Shawbrook Bank has reduced rates by 0 20 to 0 35 across its residential refurbishment range Karen Bennett sales and marketing director commercial mortgages at Shawbrook said It is testament to the hard work of the Shawbrook teams and the close relationship we have with our broker partners

    Original URL path: http://mortgagesforbusiness.co.uk/news-insight/2016/january/january-sees-uk-lenders-launch-raft-of-new-and-revised-products/ (2016-02-16)
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